“Creating value”; “delivering value”; “the value proposition”; “focus on value, not cost”; “price is a reflection of value” – just a few of the statements we are using on a daily basis.
But what is value?
Value comes in different forms and types and can be different for a business, it’s shareholders, clients/customers, suppliers, employees. For example: A business might define value in recurring business and it’s loyal customers; the Board might value the increase in assets on the balance sheet; Shareholders define value in the profitability of the business that convert into dividend payments or an increase in the share price; Suppliers sees value in market penetration; Employees perceive value in an inviting work environment, culture, recognition and benefits received from their employer.
In previous posts, we covered “how to build a compelling value proposition” and what is “your value proposition“. Value was associated with what you offer (sell) into a buying market – a product or service that addresses a specific need and is of value in a commercial world. “Remember – you define your value proposition, but it’s true value is in the eyes of the beholder – your customer.”
So you are creating value for your customers in solving a specific problem or providing to a specific need in a way that makes your product of service desirable. So when you want to describe your value, it is important to think about the customer’s need first. Being customer centric in your product or service design ensures your business is aligned to deliver to a specific customer (market) need, in a profitable way – value to the customer drives business results in revenue. Excellent customer service ensures recurring customers, customer retention means future revenue growth. Satisfied customers talk about your product and service which brings revenue growth. Thus focussing on the customer value first will lead to the other types of value, as mentioned above.
But how can you define value for your customers? Well, by simply asking if your product or service helps the customer to:
- make their life easier or better?
- save them time?
- save or make them money?
- be happier?
- be more positive?
- be healthy?
- be more productive?
- improve their effectiveness and/or efficiency?
- achieve their goals and objectives?
- build relationships?
- make more friends?
- get more customers?
- etc…?
Place yourself in your customer’s shoes – be a customer to your own product and service. How does it make you feel? Does it help you – in what way? Use the answers to these questions to continuously improve your value.
Action: Have a look at your value chain and identify how the different processes, teams and people, add value in different ways and how these combine, to focus your value proposition onto the customer.
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