Customer Value Analysis (CVA) Overview

Customer value analysis (CVA) is a customer-survey methodology that helps organizations increase market share. It works best in the business-to-business and consumer-durables markets, where customers make purchase decisions based on their judgment of value (formed by their perceptions of quality and price). In the aggregate, customers flow away from organizations that provide inferior value to those that provide superior value.

To develop an effective strategy for increasing customer-perceived value and resultant market share, it is first necessary to know where your organization stands relative to its competition. A value map presents a graphic display of your organization’s competitive position in the market. Organizations in the upper-left diagonal provide inferior value to their customers, because their prices are perceived as being too high relative to the quality of their products and services. Organizations that get stuck in this position tend to be acquired or go out of business. Organizations in the lower-right diagonal provide the highest quality at a particular price point. These organizations tend to gain market share.

Value Map

Value maps reveal competitive position at a high level. To make effective plans for increasing market share, an organization must first drill down to examine two things:

  • The importance of industry-specific attributes that form customers' perceptions of overall quality and value.

  • The organization's performance on these key attributes relative to its competition.

The value map graphically shows how the key attributes relate to each other, and how important each factor is to the formation of quality and value perceptions. The attribute comparison table reports whether customers rate your organization’s performance on these key attributes as better, worse, or statistically about the same as your competitors’ performance. This kind of table is not shown here, but is described more fully in our white paper.

To perform customer value analysis, it is necessary to sample the entire market, not just your own customers. The surveys must be conducted blindly in order to obtain valid information on competitors’ performance. (In other words, the market research vendor does not identify your company as the survey's sponsor.) To avoid distortion of the sample and the results, we advise companies not to tie the results of these surveys to compensation. Finally, to make improvements that are significant enough for customers to feel, we recommend that you align your process metrics with the key attributes.

To learn more about how Oriel Incorporated’s customer value analysis consulting services can help your organization increase market share using customer value analysis, please call 1-800-669-8326 or click below.