Are Value and Price Becoming Equals for Customer Loyalty?

How price and value impact customer experience

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Are Value and Price Becoming Equals for Customer Loyalty
Loyalty ManagementInsights

Published: December 30, 2020

Rebekah Carter

For years now, business leaders have agreed that the price and value of a product can’t compare to the experience that a customer gets when interacting with a brand. If you want to generate loyal and dedicated clients, then you need to ensure that you’re giving them meaningful and memorable experiences. However, ignoring price and value entirely would be a foolish thing to do.

After all, the price that your customer pays for their product is going to have an impact on their experience. If someone buys an item for you for £400 and finds it elsewhere for £200 afterwards, this will turn the experience sour, as your customer will feel as though they’ve been tricked into spending more than the product was worth.

At the same time, the value of the product influences how your client feels about the investment overall. If they spent a lot for a product but it had a huge impact on their lives by solving various complex problems, then the purchase seems worth it. The transaction was beneficial to them, and they feel as though they’ve made a good choice.

So, how exactly do price and value impact customer experience?

Value vs Price in Customer Loyalty

The first thing to note is that though similar, price and value are not the same thing. The price of a product is essentially an arbitrary concept. Companies choose a price for an item based on a selection of factors, including the state of the economy, the competition in the marketplace, and various other elements. The price of an item can change, and often does over time.

The value of an item is more fundamental. It refers to the kind of return on investment and outcomes a customer can achieve with the product. For instance, someone could sell you an entire computer system for $5, but the value of the product you’re getting would generally be a lot more – despite what you paid.

Value is a difficult thing to measure for most businesses, as it depends on various factors, including how your audience feels about your brand, and how much they appreciate your products and services. For instance, you might spend more for an Apple phone that can do the same things as a phone from a different provider. However, the perceived value of the item in the eyes of the customer is much higher because it comes from Apple.

Companies can increase the value of what they sell by not just enhancing the features and functionality of the item, but also by changing how the customer feels about the brand – through better customer experience.

Are Price and Value Equal for Customer Loyalty?

Price will always have an influence on the way that consumers choose products. We all have budgets to consider, and the general state of the marketplace allows us to evaluate how much we should generally pay for what we need. In an environment where the economy is often shaky, price will be an important part of appealing to your audience.

However, as brands like Apple demonstrate, many customers will be willing to spend more than the average for a product if they believe that its value is higher. If your customer thinks they can get more

value from you in terms of strong customer experiences and opportunities, the price becomes less important.

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