Creating customer value is hard. Converting value into revenue growth is harder but is the single greatest activity you'll take to build lasting growth in your business. Without a firm grasp on what your target customer values most, it’s challenging to stand out in the market you serve. It’s difficult to figure out how to continuously deliver and enhance your value proposition as your customer's needs evolve. In this article, we aim to provide clarity on how to define value, how to understand what your customer values, offer tips on how to create and increase value to your customer over time, and most importantly, how to translate that into tangible, measurable revenue growth. Topics you'll learn more about... What is customer value? What are the benefits of understanding your customer values How do you discover what your customer values? How do you create/enhance customer value? How do you translate customer value into revenue? Learn more or download the full white paper here: www.successlabs.io

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Translating Customer
Value into Revenue
Tips and Lessons for Creating, Growing and Translating Customer Value into Revenue Growth

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Executive Summary
Creating customer value is hard. Converting value into revenue growth is harder but is the
single greatest activity you'll take to build lasting growth in your business. Without a firm grasp
on what your target customer values most, it’s challenging to stand out in the market you
serve. It’s difficult to figure out how to continuously deliver and enhance your value proposition
as your customer's needs evolve. And in the end, you will have a tough time not just acquiring
new business but increasing revenue from your existing customers. According to a recent
Harvard Business Review article entitled, "The Elements of Value", defining and executing
on the right combinations of customer value pays off in stronger customer loyalty, and
sustained revenue growth.
Nowadays, companies are installing customer-facing teams like Customer Success to focus
squarely on bringing their company’s customer value proposition to life. Customer Success
professionals sit squarely in the center of the customer, responsible for elevating the value a
customer receives from a company’s goods and services. It’s especially prominent (and
critical) in companies with recurring revenue SaaS model. We will cover more on this topic
later in this article.
In this article, we aim to provide clarity on how to define value, how to understand what your
customer values, offer tips on how to create and increase value to your customer over time,
and most importantly, how to translate that into tangible, measurable revenue growth.
Topics we’ll cover include:
• What is customer value?
• What are the benefits of understanding your customer values?
• How do you discover what your customer values?
• How do you create/enhance customer value?
• Conclusion

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What is customer value?
Ask providers, customers, and consumers how they define "value" and you're likely to get
several variations. You're likely to hear definitions that directly contradict one another. Further
compounding this challenge is how to distinguish between Customer Value and Consumer
Value, as a consumer and a customer are not the same. Though both are important to
understand, they are distinctive in nature. Generally speaking, a “Customer” is the buyer and
potentially the end user of a particular product or service; whereas a “Consumer” is merely
the end user of a product or solution. Understanding the value of both distinctive personas is
critical as you have to provide sufficient value to both to be successful and unlock growth.
There has been extensive research and writing on the topic of customer value. While combing
through dozens of articles on the subject of customer value, a standard definition emerges.
At its most basic level, Customer Value can be defined with the following equation:
Customer Value = Benefits - Cost.
In this equation, we see that value is the byproduct of the defined benefits a customer receives
minus the costs associated with the purchase. To further explain, the cost is also more than
just the price of something. It includes the time and effort put into both the purchase,
installation and ongoing usage/maintenance of the service.
“To persuade customers to focus on total costs rather than simply on acquisition
price, a supplier must have an accurate understanding of what its customers value
and would value.”
-Harvard Business Review

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In the article, "The Elements of Value", they took the construct of Maslow's hierarchy of needs
and translated that into a framework that helps companies learn how to understand and
create customer value. Their framework defined 30 distinctive elements of value across four
categories:

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Their hypothesis, proven out via a comprehensive survey, was that companies that identified
the right combinations and pursued intentional strategies to enable their customer to acquire
more of these elements of value saw much greater brand loyalty, higher revenue, and longer
lifetime value. Similar to Maslow’s original hierarchy of needs, companies should ensure they
are addressing the more basic, essential needs (functional) while constantly identifying more
aspirational and differentiating elements higher up the hierarchy in order to be more
competitive and thus experience lasting success.
Not to oversimplify either of these approaches, as they both bring unique and highly useful
perspectives to this topic, but in a nutshell, we can safely agree one creates value when a
customer gets more than they give.
{Customer Value = Benefits – Cost}

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Download the full white paper here:
https://www.successlabs.io/resources