Customer Value Analysis
The Basic Facts of Customer Value Analysis (CVA®)

PIMS pioneered customer value measurement and generated the evidence on how central it is to business strategy. Customer value is the combination of customer preference and relative price.

  • Customer preference looks at this business versus competitors, from the specifying customer’s point of view and on all the non-price attributes that affect the purchase decision. The “wins” (better than competitors) and “losses” (worse than competitors) are totted up across all competitors and all attributes (weighting by importance). This results in a customer preference score that is the net % wins minus % losses. Note that this metric is not just “customer satisfaction”. It includes non-customers, is relative to competitors, and reflects not just the product itself, but also the service and image factors affecting the choice. Though sometimes the word “quality” is used to describe this dimension. It is much more than “quality” in terms of meeting specifications.
  • Relative price measures what customers pay for your products across the range versus competitors’ closest equivalents.
  • Customer value is NOT the lifetime net present value of a customer’s cash payments to you (weighted by retention probability): a metric often used in utilities businesses. We are looking at what the customer gets from you, not what you get from the customer.
Objectives

We developed Customer Value Analysis (CVA®) software to support senior level managers in the area of:

Customer Value comes as close to being a panacea for business problems as anything else that has been suggested to date. Businesses offering customers preferred products or services at better-than-fair prices are more profitable. They gain market position more rapidly than those offering inferior value. There is, however, a moderate cost for getting to superior value.

To learn more about the meaning of Customer Value and Customer Value Analysis (CVA®) please take a look on our latest research article (click here).

Customer Value Analysis Software
Contact us today

If you are working on strategic initiatives that require information about your company’s position in the market place, or the factors that drive company growth, you will find the PIMS Customer Value Analysis offering to be an invaluable tool. Should you be interested in our CVA tool, please contact us today, we would be delighted to set up a meeting with you to give a detailed overview of our customer value analysis software and the benefits of participation.