A Comparison Of Commonly Used Methods For Measuring Customer Value: An Empirical Study

Abstract

It is widely recognized that customer value is key to business success. However, considerable divergence of opinion exists on how to most adequately measure customer value. The authors compare four measurement methods (i.e., the methods of Dodds, Monroe, & Grewal; Gale; Woodruff & Gardial; and Holbrook) in terms of predictive ability of satisfaction, repurchase intentions and word-of-mouth. Furthermore, they examine whether the methods’ relative performance depends on product type and level of customer involvement. This study reveals that customer value should be measured in a multi-dimensional way and that, generally, consequence-based methods perform better than attribute-based methods.