Understanding what your customers really value can help you to market your products and services more effectively. We normally find that our clients want to earn more money from their business; may clients have recently found that delivering customer value is a great way to earn more profit.
What is customer value?
Customer value is the perception of what a product or service is worth to the customer. Customers don’t buy features – they buy benefits. Your customers buy your product or service because of the benefits they get. If you take the time to understand what your customers value and what they are willing to pay for, you will be able to market your business more effectively, win new customers from your competitors, probably increase your prices and certainly make more money.
Most businesses make the mistake of thinking about value purely in terms of money. They create special offers to promote their products and services, but all they are do is cut their profit margin in a race to the bottom. Of course most markets have a for a lowest priced competitor, but do you really want it to be you? It doesn’t work for everyone and means you need to cut your costs to the bone, and keep your selling prices low. For example in the airline industry – there isn’t room for more than a handful of low cost airlines. That’s why many of them are in financial difficulty – their costs have gone up, but there is downward pressure on pricing.
Value is about much more than just money.
Put yourself in your customer’s shoes – your customers think of value in terms of goals, benefits and results. They are seeking an outcome and this is what drives their purchasing decision. For example, we might save a client £6,000 on their tax bill (that’s not unusual), we might need to charge our client £2,000 but the monetary value to the client is £4,000. What if this is only the beginning? What if the customer wants to grow their business over the next 5 years. That’s where we add value by providing advisory services , to help them to achieve that goal. Our happy clients pay for the additional service because it helps them to achieve their goal. How could you adapt that in your business, so you help your customers get more value from what you do?
The overall perception of value is, from a customer’s perspective, also influenced by experience. If you were difficult to deal with and your customer has to regularly drive to your office to sign paperwork, have face to face meetings, etc. your customer will not think that your service is great, they may even question whether it is worth the money. But if you did your meetings over Skype, at a time convenient for your customer and provided documents by email with e-signature capability, your customer may value the convenience and efficient service to the extent that they may even be willing to pay more for that service.
Amazon.com is a great example. The high street is struggling yet the world’s largest online retailer continues to grow. Why? Because its customers value the convenience, the vast range of product choices on offer and the ease of purchasing. Amazon has aligned its business model with the values of its customers and that is why it continues to succeed.
How can we help you?
Creating more customer value doesn’t have to cost you more money, and can help you to increase your profit. We can’t deliver your customer value for you, sorry. However if you want help to understand why you’re not making as much money from your business as you used to and what to do about it, we certainly can.
Call us for a free, no obligation consultation. We understand money, you understand your business and we can help you focus on the right money decisions in your business.