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This chapter is from the book

Perceived Value

In CVA®, customer value is defined as the value perceived by the customer.

  • Perceived value is the maximum that the customer will pay for your product or service.

Perceived customer value is not price—it is the ceiling on price. It can be both measured and managed.

Perceived customer value may well be different from actual value. In fact, most of the time perceived value is less than the actual value a customer receives because a customer rarely knows all the value a product or service provides.

Perceived value alone has been found to be an important leading indicator of financial performance in a variety of studies conducted by different researchers with different sets of data (Exhibit 1.6). In a process the author facilitated for members of the Conference Board’s Council on Corporate Brand Management (described in Chapter 10, “Building the Marketing Accountability Scorecard”), perceived value was selected as the most important single measure of brand health by a nearly 2:1 margin over the next most frequently mentioned measure.

Exhibit 1.6 Research findings regarding perceived value and financial performance20

  • “The relationship between brand equity and stock return was...strong.”
  • —Jacobson and Aaker, EquiTrend data
  • “Brand differentiation and relevance are leading indicators of brand success.”
  • —Agres, BrandAsset Valuator data
  • “There is no doubt that relative perceived quality and profitability are strongly related.”
  • —Buzzell & Gale, PIMS data
  • “...brand equity is found to have nearly as strong an influence as ROI [on stock return].”
  • —Jacobson and Aaker, Techtel data
  • “...Corporate brand image actually has some degree of influence on a significant 75 percent of the key factors that explain stock price.”
  • —Gregory, Fortune 500 data
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