The importance of Value in Business

I recently enjoyed reading an Article by DrDamnit entitled 7 Secrets of Success in the New Economy Revealed and reminded me of one business strategy that is always important regardless of the economy.

Those that deliver service as well as product will always win out over those (competitors) providing product alone.

It really doesn’t matter what your "product" is. Supplying that little bit of extra "added value" over and above product alone will make a huge difference. It’s all about extending what you normally offer with exemplary customer service.

So, what is "added value" ? It is not about chopping the price, or providing freebies, and it cannot be bought or sold. It is harder than that. It requires thinking about the types of things that will make a real difference to your customers. That "something extra", the "added value" becomes your value proposition. It has to deliver something that your customers consider to be worthwhile. With a well defined value proposition, you can avoid the price wars often associated with supplying product alone.

To the customer, value is often far more compelling than price alone.

Well there is one small challenge. Your value proposition will work, if and only if, the customer can perceive the value as "worth" something. If they do, it will definitely make it harder for your competition to match what you are doing (especially if that "worth" is non-tangible). If it is worth nothing to the customer, then it is not real value, and to call it so, in reality might start to devalue all your offerings, or become the target for your competitors.

To provide the value add successfully, you need to understand your customer, and start to augment some of their gaps, or appeal to their interests with some of the resource you have access to. That comes back to the concierge philosophy in DrDamnit's article.

While you might decide that your "value" is going to be a new iPhone, it is worth nothing if the customer has just shelled out good money for a Nokia. In that case it is likely to back fire because you could have offered a solution earlier if you knew your customer, and clearly (to them) you don’t.

Or, maybe your "value" is that new piece of software that they are clearly missing from a strategic / infrastructure perspective. So long as you are going to maintain or help them with it. Don’t then turn around and say it is going to cost them an arm and a leg in maintenance.

There is one approach that does work really well with "freebies". That is when you can provide a product free of charge under the guise of helping you with their feedback to gain marketing intelligence and appraisals. It is not so much a "free gift" as asking for a favour.

A friend of mine (interestingly, called him "friend", but in all reality just a very good and trustworthy supplier) approached me with a new GPS tracker saying "I know you are on this new bushwalking health kick, can I ask you to carry this GPS tracker so we can test it out ?". We tested it and worked really well, he gifted it to me to say thanks, and he has since sold a couple to other friends through word of mouth. He now has several great testimonials to go to market with.

Value here works both ways. I got a new toy, and felt quite important that my feedback was valued. My supplier has further endeared himself through great product, as well as gaining valuable go to market material (let alone a couple of easy sales).

Value is so very often a two-way thing. Overall, you will receive far more in return if you do it right, and position it correctly.

Most likely your "value add" will start with the simple things. Things that position you as a better business partner through your knowledge and interest with your customer. Often it can be a timely phone call, an immediate acknowledgment, a follow up within 48 hours, the fast response, the strategic advice, or a detailed report on what will happen. It is quite amazing how much "value" a clear and detailed report can offer. Our report summaries are often used directly for submission to the decision makers (and strategically written that way).

Your value will come from whatever you have at your immediate disposal which is both achievable and doable (consistently).  Also, don’t forget your value proposition is not restricted to what you provide directly - it can be who you know, who you recommend. Start using (growing) your own network of "valued" partners.

You can provide real value by introducing an appropriate expert rather than taking it on yourself. All too often we see "Yep I can do that" and ends up going pear shaped. Far better saying "Yep I know exactly the right person" and having the job done right, and get a return favour into the bargain. There is nothing worse than watching another supplier coming in to fix a faux-pas and watch them out service you.

However, if your customer regards you as their "go to" person, then that becomes a wealth of "value" to your business and your network of partners. You then start to help  manage those areas of the business where you do have the expertise. It allows them to focus on their core business (and not the "headaches"). In turn, that is worth something to the customer and delivers real value, often achieving the lofty and enviable position of being their trusted business advisor.

There needs to be a viable and tangible sense of added value from your customers perception.

Your value assets need to make a difference, they need to be seen as "worth" something.  If you can do that, reliably and consistently, then you will be the preferred supplier for many a customer, and make it difficult for your competitors to win customers away.