Customer value metrics

Abstract

This paper focuses on customer value analysis and measurement, framing customer value management as one of the main antecedents of the company value-creation process. The paper builds on three main pillars. First, the paper highlights the critical role of customer value in business-to-business markets, focusing on the links between the company's ability to manage customer value-creation processes and the positive financial and economic outcomes generated by loyalty effects. Secondly, the paper develops key analytical stages for an understanding of customer value. The focus is on the customer value-chain concept, including consideration of the customer information and acquisition process and its decision rules. Third, the paper illustrates the measurement process, offering an organizational framework for selecting the most suitable method for measuring perceived customer value. The methodological alternatives range from desk measures (e.g., technical computation of the total cost of ownership (TCO)) to field analysis, like those considered under both compositional and the decomposition approaches (e.g., conjoint analysis). The paper concludes with remarks on the managerial implications of these measures, as well as offering suggestions for further research on value for the customer.

Citation

Busacca, B., Costabile, M. and Ancarani, F. (2008), "Customer value metrics", Woodside, A.G., Golfetto, F. and Gibbert, M. (Ed.) Creating and managing superior customer value (Advances in Business Marketing and Purchasing, Vol. 14), Emerald Group Publishing Limited, Leeds, pp. 149-204. https://doi.org/10.1016/S1069-0964(08)14005-4