Assessing the value of commonly used methods for measuring customer value: a multi-setting empirical study

Abstract

Despite the importance of customer value, considerable divergence of opinion exists on how to adequately conceptualize and measure this construct. In this study, four commonly used methods for measuring customer value (i.e., the methods proposed by Dodds et al. (1991), Gale (1994), Holbrook (1999) and Woodruff and Gardial (1996)) are compared. First and foremost, the psychometric properties of the different methods are evaluated. Next, the authors compare the predictive ability of the different methods with respect to key outcome variables (i.e., satisfaction, word of mouth, repurchase intention). Finally, the methods are compared based on their relative practicality and actionability. The authors' findings show that each method has its own benefits and costs and should be used based on its suitability for a particular application. The paper culminates with a prescriptive flowchart that summarizes the main findings and provides direction for choosing the optimal value measurement method.

In Search of Apprehending Customers’ Value Perception

“…By the same token, measuring the value delivered to a consumer in many services industries requires apprehending the nature of the service delivered. For example, various CVP measurement methods have been developed to capture CVP in healthcare [Chahal, Kumari, 2012], tourism [Gallarza, Saura, 2006] and service transactions in general [Lin et al, 2005;Ruiz et al, 2008;Huber et al, 2007].…”

“…In reflective models indicators can equal manifestations, and therefore effects of the construct measured, while in formative models indicators are the causes/grounds of the construct formation. Using different models to test the same construct generates different outcomes [Lin et al, 2005]. Authors clearly prove, how divergent managerial implications can be driven while using the conceptual model without knowing its nature and consequences.…”

“…Clearly conceptualizing and measuring customer perceived value (CVP) poses a challenge to both academia and industry [Woodall, 2003;Zubac, Hubbard, Johnson, 2009;Leroi-Werelds et al, 2014]. First, the value is individually, subjectively and socially constructed [Holbrook 1996;Holbrook 2006;Sánchez-Fernández, Iniesta-Bonillo, 2006].…”

“…Third, customers can simultaneously have a mixed, or even contradictory value perception of certain goods or services and often either do not fully realize the grounds for these diverse opinions or hide their preferences [Dubois, Laurent, Czellar 2001]. Value perceptions also evolve as people change their opinions, attitudes and behaviors over time [Woodall, 2003;Holbrook 2006;Tynan et al 2010;Leroi-Werelds et al, 2014]. Last but not least, customer buying behavior can be partly (or totally) disconnected from the articulated opinions about the value attributes.…”

Experience Value, Satisfaction and Loyalty of International Tourists in Shanghai: A PLS-SEM Analysis

“…The authors state that loyalty considered as a consequence of value and satisfaction is a widespread reality (Cronin et al, 2000;Gallarza et al, 2011;Leroi-Werelds et al, 2014;Parasuraman and Grewal, 2000;cited in Gallarza et al, 2016). In 2015, Gallarza et al found that satisfaction is the behavioral consequence of perceived value, with loyalty being the final outcome (p. 147).…”