How many of your customers seem to confuse price with value?
Do you feel they don’t understand the difference and so expect a lower price than makes economic sense for you?
Perhaps the real question here is, “Are you clearly showing the real value of your product or service?”
After all, value is something your customers pay for and what you perceive as value might not be what they want to pay (extra) for. Value is what your customers see as being something of worth to them, something that will save them time, effort, money or deliver some other tangible benefit to them.
And, of course, value can change with time – depending on the product or service. The value of warm, weatherproof clothing as winter starts is much higher than the same clothing in summer, which is why canny shoppers often wait until the end-of-season sales to stock up for the next year.
Similarly, the value of something changes with its level of availability. Items in short supply are generally seen as being more valuable than the same items when they are plentiful. The fluctuations in the crude oil price is a good example here – as soon as there is a threat to the supply line, prices rise (as they typically do with the onset of the Northern Hemisphere winter, when demand increases considerably for heating and power generation).
Offsetting this is the fact that buyers of products and services generally look to pay the lowest possible price in return for receiving the highest value, so it’s critical to really understand the motivation of your customers, as well as the timing of your offer, in order to be able to clearly demonstrate the value of your offering.
This is where strong customer relationships come in. By remaining in constant contact with you customers and understanding how they benefit from your product or service it becomes much easier to explain this to potential new customers. And value can, of course, come in many guises. For example, it might be about quality / warranty, operating costs, delivery time/availability, post (or pre-) sales support and assistance, simplicity of operation (or dealing with you), or even design/packaging and/or brand name alone. It really depends on how your customer believes they can derive maximum benefit.
So, think about how well you understand what your customers really need, what they value about your offering today and what they might like in addition tomorrow. Have you room to improve the value of your offering and can you show this to justify a higher price (or an easier sale)?
And remember that, as Publilius Syrus said over 2000 years ago, “Everything is worth what its purchaser will pay for it.”
P.S. Harvard Business Review back in November 1998, explores measuring value in this article if you want to explore the concept in more depth.
#BusinessFitness #CustomerExperience #CustomerService #LifeTimeValue #Loyalty #Pricing #Product #Strengths #Success #QOTW
Some related recent short posts that might be of interest:
- “Just get rid of the crappy stuff and focus on the good stuff.” – Steve Jobs
- “Excellence is Not a Skill. It is an Attitude.” – Ralph Marston
- Top Line or Bottom Line?
- “Wherever there is change, and wherever there is uncertainty, there is opportunity!” – Mark Cuban
- Go the extra mile. It’s never crowded there.
- “Your most unhappy customers are your greatest source of learning.” – Bill Gates
- Back to Basics – Focus on Product Excellence First
- Measuring the TRUE Value of Your Customers