Add value they say. Establish value before establishing price they say. So much has been said about value yet it is a concept that we still see many struggling to understand and therefore apply. Value comes up in conversations about sales, marketing, digital marketing, manufacturing, social media management, customer service and just about any other area that is related to business. So we are going to define value and also go a little deeper by you helping you to identify value in your business, product or industry.
Value vs price
A good starting point is a quote I love which states that “price is what the customer pays, value is what the customer gets“. I love this and chose to use it as a starting point because it establishes a separation between price and value and makes sense of the concept of value for money. Value is therefore what the customer ultimately derives from using a product or business, it is the benefit to the customer that flows from choosing you. Value addition is therefore the improvement of the benefits a customer receives from a product or object.
To go a bit deeper into the idea of value notice that in each instance value is established on the customer’s terms. The concept is however not limited to customers. Thoughts about value should really be extended to consumers because even free offerings provide value. This article you are reading has been availed to you at no cost. However, if you find the article does not provide the value you would stop reading or write a very angry comment at the bottom of this. So value comes in all shapes and sizes and can be expressed in different ways. This leads me to my favourite definition of value.
Value is whatever the customers say it is
I know not which genius came up with this but they succinctly summed up the discussion on value perfectly. Value is incredibly subjective and as mentioned it really is up to the customer or consumer what value is. You cannot separate value from the expectations of the consumer or end-user and this is the mistake I have seen made many a time when it comes to the concept of providing or adding value. You see many businesses are doing what they can or what they want to rather than what the customer needs. I have seen financial service providers, as an example of something I understand, utilise their social media platforms for celebrating arbitrary days of the year whilst the questions which their expertise are best suited to answering go unanswered.
How to identify value
We live in the greatest time for information. It is much easier to send information than ever before but it has also become easier to receive it. Social media has given all of us the ability to openly study conversation around a subject. Not all social media are created equal of course but on average they are a melting pot of insights, opinions and behaviours. To practically assess what value means in your market or industry you simply need to look at what people are asking for or about. What questions do prospects ask most during the sales process? What do existing customers often ask about that you are not currently offering? What do they struggle with understanding the most about your product, market or industry? What do they deem essential in your product? The questions I have asked here are widened to accommodate different types of businesses but the principle should be clear.
Value isn’t always obvious
The conversation on value isn’t always straightforward because value isn’t always obvious. It may be easy to see that your fresh chips customers would appreciate drinks to go with their chips. It may not be so obvious that customers prefer these chips in a bag than a box. The value or the value opportunity isn’t always easy to identify. Sometimes the value you bring isn’t even related to the product itself. It could be in processes or people around the product and how well they work with customers.
Value can be added and taken away
One last thing I’d like to point out is that just as value can be added it can be taken away. Yes, changes or other things can diminish the value in the eyes of a customer. One good example is a complicated signup or engagement process. If you find yourself having to explain the steps in a signup process you’re probably doing it all wrong. If there are more than 3 steps you are definitely doing something wrong. This can reduce or completely diminish the value of signing up for the product in the first place.
Value is all-important, it is after all that makes people visit your business in whichever way they do, in person or online. Find your value opportunities and increase the value proposition to consumers.