- November 13, 2018
- Posted by: Koyona Duke
- Category: Entrepreneurial Development, Learning, SME Support
Imagine someone asking you to tell them what others think of you? Won’t you be tempted to say only the best things? That’s very similar to asking a business to establish value. Some businesses have closed because of simply failing at this.
Simply put, Value is the way your offering; good or service is perceived to fulfil a need that your customers have. Basically how your customers believe your goods or services are meeting their needs. My favourite definition of value that really breaks it down is by Karl Stark and Bill Stewart they define value in this simple equation (don’t be afraid it’s not real math, okay maybe just a little):
Benefits of a product or service – The Cost of product or service = Value
After you have taken out the cost of the goods from the benefits it offers your customer example a 10% saving or a bulk buying discount, then what is left is value. As we can see from that definition, it has nothing to do with the cost of that product to your customer.
In today’s market, where buyers are constantly bombarded with different marketing messages and competing prices, the value is what makes you stand out.
Ask yourself why would a customer who could pay #30,000 to buy a yard of fabric from my store agree to pay #60,000 to my competitor. What has my competitor done or what is my competitor saying for this to happen?
The big difference between the two businesses is the placement of the brands in the customers’ minds. The customer may wish to be associated with the prestige and special services your competitor offers as opposed to just buying from you? Maybe your competitor is better located to attract this customer and in that case, the value becomes the ease of access.
Here are five ways you can solidify your value in the minds of your customers.
1) Communication: I like to say relationships are everything because this is true. Once you can build a relationship with your customers you have access to ask the questions get to know them in a way that your competitors cannot. This brings you closer to establishing value. The value to your customer will be feeling special.
2) Your Value proposition: when you speak about the deep satisfaction your client can receive from using your good or service can you defend it with actions and strategy? If you offer luxury service at regular prices is this something you can scale and can you defend it without hurting your business?
3) Find a Niche where you can focus on pronouncing your value: It’s easier to light a smaller room that it is a bigger room especially when you are a small business. You can find an underserved niche in your market of choice making it easier for you to build relationships and scale.
4) Consistency; Value is something that is established over time. If a customer has an experience with your business today and comes back and that experience changes tomorrow, they are bound to feel a certain resentment towards you. Ensure that you are consistent with your messaging and the full experience you offer, also be consistent with quality because any difference especially if it’s worse makes the customer associate your brand with lies.
5) Listen to your customers’ feedback: Feedback is one of the most valuable gifts you can receive from a customer, do not take it for granted. Feedback will not always be positive, if it’s bad, it’s up to you to consider the issues raised by the unsatisfied customer and address them in the most strategic ways, so that your business can thrive.
Small businesses have a particularly good position because they can be closer to their customers, and have an easier time of serving niches more effectively than bigger organisations. Once your business can communicate value, it becomes associated with your brand helping you build brand equity is a market giving you an edge every time.