Customer perceived value : reconceptualisation, investigation and measurement

Abstract

The concept of customer perceived value occupies a prominent position within the strategic agenda of organisations, as firms seek to maximise the value perceived by their customers as arising from their consumption, and to equal or exceed that perceived in relation to competitor propositions. Customer value management is similarly central to the marketing discipline. However, the nature of customer value remains ambiguous and its measurement is typically flawed, due to the poor conceptual foundation upon which previous research endeavours are built. This investigation seeks to address the current poverty of insight regarding the nature and measurement of customer value. The development of a revised conceptual framework synthesises the strengths of previous value conceptualisations while addressing many of their limitations. A multi-dimensional depiction of value arising from customer experience is presented, in which value is conceptualised as arising at both first-order dimension and overall, second-order levels of abstraction. The subsequent operationalisation of this conceptual framework within a two-phase investigation combines qualitative and quantitative methodologies in a study of customer value arising from subscription TV (STV) consumption. Sixty semi-structured interviews with 103 existing STV customers give rise to a multi-dimensional model of value, in which dimensions are categorised as restorative, actualising and hedonic in type, and as arising via individual, reflected or shared modes of perception. The quantitative investigation entails two periods of data collection via questionnaires developed from the qualitative findings, and the gathering of 861 responses, also from existing STV customers. A series of scales with which to measure value dimensions is developed and an index enabling overall perceived value measurement is produced. Contributions to theory of customer value arise in the form of enhanced insights regarding its nature. At the first-order dimension level, the derived dimensions are of specific relevance to the STV industry. However, the empirically derived framework of dimension types and modes of perception has potential applicability in multiple contexts. At the more abstract, second-order level, the findings highlight that value perceptions comprise only a subset of potential dimensions. Evidence is thus presented of the need to consider value at both dimension and overall levels of perception. Contributions to knowledge regarding customer value measurement also arise, as the study produces reliable and valid scales and an index. This latter tool is novel in its formative measurement of value as a second order construct, comprising numerous first-order dimensions of value, rather than quality as incorporated in previously derived measures. This investigation also results in a contribution to theory regarding customer experience through the identification of a series of holistic, discrete, direct and indirect value-generating interactions. Contributions to practice within the STV industry arise as the findings present a solution to the immediate need for enhanced value insight. Contributions to alternative industries are methodological, as this study presents a detailed process through which robust value insight can be derived. Specific methodological recommendations arise in respect of the need for empirically grounded research, an experiential focus and a twostage quantitative methodology.