Why You Should Become a Student of Customer Value

By: Ray Benedicktus

When you were in school, you studied history, math, science, and a host of other topics. Understanding these things, even at a basic level, required you to spend at least 180 hours each year in the classroom (per subject), plus a lot of time on after school assignments. As a result, you are prepared to think about the outcomes of government policy, can determine if you are given correct change, and know that dihydrogen monoxide is an essential part of your daily diet.

How many hours have you spent studying your customers this year?

Zero? Less than 10? More than 180?

How can you be prepared for business if you don’t spend time studying the most important ingredient; your primary source of revenue; your target customers?

Like grammar school subjects, understanding customers has a lot of interlocking components. You should understand where your brand stands in relation to your competition, the associations that customers have with your business, the content customers find relevant on social and website channels, how customers search and process information on your website, how customers perceive your service in relation to their needs and expectations, and overall, what do your customers value.

Do Customers Value Your Brand?

Brands evolve from new, unfocused brands to niche brands, to leadership and mass market brands, and finally, into commodity brands before either innovating or eroding. Brand value is determined primarily by consumers’ knowledge of- and esteem for your brand and the value you are adding to customers through differentiation and relevance.

Brand knowledge measures the depth of understanding consumers have for a brand. Customers’ esteem for a brand reflects how a brand lives up to its promise and the respect and regard that customers have for your business. Differentiation explores the unique meaning that your brand conveys to enable you to stand out and capture the attention of consumers. This factor most relates to brand pricing power and loyalty. Brand relevance captures the extent to which your brand is meaningful and relevant in the lives of your customers.

These are the four critical marketing factors that will determine your boom or bust, so if you are going to put a branding survey together, this is where you want to focus a lot of attention.

How to Determine Content of Value

Even if you are as different as you think, your brand value will not explode overnight. It will be an outcome of word-of-mouth, consistent customer experiences across repeated product/service experiences, and relevant CONTENT!

Content is delivered in many forms, including product and service designs, location aesthetics, packaging, advertising, social media postings, and website messaging and functions. Make a list of all the ways that your brand is visible to your target customers and investigate tools and strategies to track the success of each touch point.

Getting Started

Although your research and metrics can be put on steroids over time, free and low cost social analytics tools, like Trackur and HootSuite will give you a good indication of how you are performing in social channels. Before you get started with tracking, benchmark and document successful postings of your competitors and of businesses like yours in other industries. You can sort and enter details for posts in Excel to include success metrics like reach, likes, shares, and interactions (actual comments). Instead of blindly blasting emails and online ads, run an experiment with multiple email subjects to similar size groups in your email database or do the same with variant images and headlines in Google, Facebook and LinkedIn ads to see what resonates best with your audience.

For a good idea of what your customers value in their daily lives, turn to the Tapestry Segmentation schema of ESRI and do an elimination exercise wherein you start with all 66 segments and keep removing irrelevant segments until you are left with the psychographic profiles of those that match your intended audience. Then try to find people that match those profiles to interview or survey when you have new ideas for your business.

Take the Time

Everything takes time, including trial and error, doing your homework, or working with an Orange County SBDC research consultant. Whichever you choose, ask yourself, “Would I rather spend time learning what it will take to derive and implement customer-centric strategies, or should I spend my time making and implementing decisions that are not consistent with optimizing my business?” My hope is that, at some level, you will invest the time necessary to become a student of customer value.

Looking to start or grow your business?

We at the Orange County Inland Empire SBDC, are here to help you with every aspect of your business to help it grow and become successful.
Give us a call at 1-800-616-7232 or schedule a quick, 15-minute intake appointment at ociesbdc.org/consultation to see how we can help you start, grow, and succeed.

Why You Should Become a Student of Customer Value

Mike Daniel is the network director of the Orange County Inland Empire SBDC Network, which assists aspiring entrepreneurs and current business owners throughout Orange, San Bernardino and Riverside counties. Mike was formerly the director of the SBDC office at Long Beach City College. As business owner and entrepreneur himself, he started his career as the owner of a Rocky Mountain Chocolate Factory location in Manhattan Beach and went on to open a second location in Long Beach in 2001. In 2007, Mike sold the Manhattan Beach store for an above-market offer then invested in several additional locations as a minority shareholder. Mike further expanded his candy empire with venture located in Shoreline Village in Long Beach called Sugar Daddies Sweet Shoppe, based on fill-it yourself candy options.

Mike has a bachelor’s degree in Business Administration from California State University, Fullerton.