Customer value measurement

Abstract

Despite the importance of customer value, little agreement exists on how to best conceptualize and measure this construct. The most commonly used value measurement methods include those of Dodds, Monroe, and Grewal (1991), Gale (1994), Holbrook (1999), and Woodruff and Gardial (1996), yet they differ substantially in terms of dimensionality (one-dimensional vs. multi-dimensional), the nature of costs and benefits (attribute-based vs. consequence-based), and the scope of measurement (relative to competition or not). The authors compare these measurement methods with regard to their predictive ability of satisfaction and loyalty and examine whether their relative performance depends on product type (think/feel) and level of customer involvement. This study reveals that customer value should be measured in a multi-dimensional consequence-based way. Overall, for feel offerings (regardless of the level of involvement), both the methods of Woodruff and Gardial (1996) and Holbrook (1999) are optimal. For think offerings, Holbrook’s (1999) approach is preferred for low-involvement settings, whereas Woodruff and Gardial (1996) is preferred for high-involvement settings.