Use (Customer) Cost

In the customer life-cycle cost of a product, used to develop product and service innovations, the cost a Final Customer incurs in employing the product in its normal application. These costs include the product price, operating costs (including labor), and inputs such as energy or other materials needed to use the product.
(See also Acquire Cost,
Dispose Cost

, Maintain Cost)

Example 1:

Luxury health clubs' roles are extending beyond fitness to become hubs of networking, entertaining, and even tourism. Many liken these gyms to "urban country clubs" which represent elevated status as well as a commitment to health.
(Year 2001 – SIC 7997)

Explanation: The health clubs extend their customers' use of the product by improving the experience the customer has with the product.

Example 2:

Private clinics and nonprofit hospitals offer luxury suites, catered meals, and round-the-clock private nurses.
(Year 2002 – SIC 8062)

Explanation: These healthcare providers improve the use of the Final customers of their product by improving the experience the customers have with the product.

Example 3:

Panera, a bakery/café chain, has begun developing a line of whole-grain breads in order to offer more choices and meet changing tastes. The new offerings include bagels. The timing is perfect as the government recently announced that Americans should consume 3+ servings of whole-grains a day.
(Year 2005 – SIC 5812)

Explanation: This casual dining chain improves its Final customers' use of the product by improving the health of its product offerings.

Example 4:

We the People is a do-it-yourself legal business. The firm does not offer legal advice, but instead, it takes information from customers and fills out legal forms on their behalf.
(Year 2003 – SIC 8111)

Explanation: This service reduces the Use cost of its Final customers by reducing the resources required to fill out legal forms.

Example 5:

Cafes and some fast food restaurants installed wireless local area networks to enable customers to access the internet while at the store.
(Year 2004 – SIC 5812)

Explanation: These eating establishments improve the Final customers' use of their service by improving the experience the customer has while using the product.

Example 6:

No two Urban Outfitters stores are the same, each one varying its displays, color schemes, cutout decorations, and soundtracks to give the illusion of being unique, even though the merchandise is essentially identical at each location.
(Year 2004 – SIC 5600)

Explanation: This Intermediary improved its Final customers' Use cost by improving the Final customers' experience.

Example 7:

Walgreens has more 24-hour and drive through pharmacies than any other drug store chain. Speed of service is key now that managed care has limited prescription price differences for most consumers.
(Year 2004 – SIC 5912)

Explanation: This retail drug chain reduces the Final customers' Use cost by reducing the time the customer must spend to find and pay for the product.

Example 8:

For independents that sell new books, internet sales are growing thanks to places like was launched in response to and to provide an online alternative for independent bookstores.
(Year 2001 – SIC 5942)

Explanation: This cooperative venture of independent book retailers reduced its customers' Use cost making it faster for the customer to find the book the customer wants.

Example 9:

Integration has been a key part of Staples' recent strategy of focusing on higher-margin small-business customers. Staples' stores have been slimmed down to focus on items aimed at such customers.
(Year 2003 – SIC 5943)

Explanation: This office supply retailer Intermediary reduced its customers' Use cost by saving the customer time through a reduction of inventory that the customer does not need.

Example 10:

Yahoo has been combining its map pages with directory information. Intel struck an ad deal with Yahoo Maps that shows the location of wireless hotspots near any address.
(Year 2005 – SIC 7375)

Explanation: This internet-resident Intermediary reduces its customers' Use cost by reducing the time the customer takes to find products on its site.