Definition (1):
Total customer cost is the bundle of costs customers expect to incur in evaluating, obtaining, using, and disposing of the given market offering, including monetary, time, energy, and psychic costs for getting the expected benefits. The costs included in the total customer cost are briefly discussed below:
- Monetary costs: These are the prices of the product that customers buy and achieve the desired utility. Precisely, these are the prices paid for the products or services for their utilities by their customers.
- Time costs: These are the amounts of time spent on finding, evaluating, purchasing, and making other decisions regarding the products. High engagement products have high time costs than low engagement products.
- Energy costs: These are the degrees of physical efforts applied by the customers for finding, evaluating, purchasing the ultimate products, and also taking those to their home.
- Psychic costs: These are the costs associated with the dissatisfaction and frustration of the customers with the products and services. These costs can occur during different phases of the purchasing process.
Definition (2):
Total customer cost means the finished parcel or costs a customer wishes to pay in the searching, investigating, buying, keeping up, and acquiring a certain item or administration. For example, a customer buying a pack of bread wants to spend less in the process for research and support, but a customer buying a car has the desire of spending much more on collecting information regarding fuel expenses, engine quality, availability of parts, and the like.