Customer Value Analysis: Definition & Example

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  • 0:03 Customer Value Analysis
  • 1:40 Measuring Value
  • 2:15 Benchmark Against Competitors
  • 2:48 Building Customer Loyalty
  • 3:36 Identify Threats
  • 4:05 Lesson Summary
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Lesson Transcript
Instructor: LeRon Haire
The lesson will define the phrase customer value analysis (CVA) along with examples that will help to explain several of the ways that CVA benefits organizations.

Customer Value Analysis

Many of you are very familiar with the expression,'the customer is always right.' However, have you ever thought to ask just why the customer is so important? Why isn't the location of a business or the quality of the product or service more important? Well, the answer lies in the fact that without customers, an organization will not exist because someone has to purchase an organization's products or services. The location can be great, and the quality can be spot on, but if the customers are not purchasing, then it is of no relevance for the business. It's for this reason that customer value analysis serves as a critical part in making sure that customers are happy.

Customer Value Analysis (CVA) refers to a research method that is used to identify how an organization is perceived by consumers of an organization and their competitors. The CVA is extremely important because it allows an organization to gauge how they are judged in comparison to their industry rivals. For example, let's say that you work for Sassy Soda, and you helped them to perform a CVA to help identify certain trends in consumer purchasing and opinions.

The results would reflect not only how Sassy Soda's consumers feel about your organization and product but also how they feel about competitors such as Panda Pop and other soda distributors. If perception is reality (as the phrase goes), then the CVA is one of the most important things that needs to be addressed by all organizations of all industries. Up to this point, we've been speaking in broad terms as to how CVA helps, but let's dig deeper to see just how CVA benefits organizations.

Measuring Value

One of the ways that CVA benefits organizations is by providing quantitative analysis, meaning that there is numerical data that is used to measure the value of consumers' opinions about an organization and others. These numerical findings will help the organization to develop a system to track progress as well as consumer satisfaction.

For example, if the data reflects that Sassy Soda's consumers really dislike the Sassy can or bottle shape, then the company can begin to take steps to develop a new shape that satisfies the consumers. The measure of value is an imperative benefit in CVA.

Benchmark Against Competitors

A second benefit that CVA provides to organizations is how they compare to competitors of the same industry in the eyes of consumers. The CVA yields information that will allow organizations to see just how they fare in comparison to competitors. If consumers of Sassy Soda really enjoy how Panda Pop interacts with their consumers through social media, then Sassy Soda can compare where they stand in the eyes of the consumer as it pertains to interaction. CVA provides methods that businesses can utilize to benchmark their place in the market against industry rivals.

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