VALUE - One of your biggest success factors in business! Here is how it works. Part I
The word ‘value’ plays a major role in our decision-making process on a day to day basis without even realizing it at times. The question is, what is value? The Oxford Advanced Learner’s Dictionary defines value as a noun to simply mean “how much something is worth” or “the regard that something is held to deserve; the importance, worth, or usefulness of something.” In other words, it is a person’s opinion of a product’s value to them, with little or nothing to do with the price per se but how the product satisfies their need or meet their expectation. That also implies that Value in itself means nothing except associated with something.
In business, however, there is a trap I commonly find entrepreneurs fall into. It is assessing things based only on price or cost. This is something I consider limiting for any business owner seeking to become successful and remain in business for the long term. From the pricing of products or services to hiring employees to compete in business, value or perceived value has proven to be one of the best ways to measure the true worth of anything.
The difference between price and value is that price is the amount of money a customer pays for a product and/or a service. Value on the other hand, is the customer’s perceived benefits of that product and/or service. It is often about the emotional connection he/she has with the product and/or service, the employee they are dealing with, or the company’s brand value associated with it, in relation to the price.
The truth is that what you sell, as a business, must be good value if it is going to be the customers’ preferred choice over what exists in the market, because, most times, customers may not be fully aware of the true cost of production of the items they buy. They are therefore often willing to pay a price based on their perception of how much the product is worth to them and it is up to you to employ marketing strategies that create the right perceived value of the product to sell to them.
Having said that, there are a number of significant benefits that a business gains by considering the value perspective in its decision making and strategy. These include:
Value can help you to prioritize, by assigning different values to different activities. Assigning value to each task enables you to better assess what to take on board, what to delegate and even the order in which each task is to be dealt with as a business.
Value helps you to assess the true worth of a product line or service to the business and whether it is time to discontinue it or not. Because, even though the particular product line or service may be making a loss, it may be attracting other benefits such as driving in much needed traffic to the business.
Value is also a better measure of ROI than cost: profit ratios or margins. Measuring success by how much profit you make can be misleading, as it may lead to you losing sight of all the other non-quantifiable financial benefits of the business such as, customer perception of your products and services as well as the business as a whole. This often has a greater impact on long term business performance and survival than immediate financial gains.
Value also gives you more options to carve out a niche for yourself, thus offering you a better set of tools to employ in distinguishing yourself from the competition and making you more appealing to your target market.
Value ultimately can win you more business, much faster and more economically than most marketing strategies. Because thankfully, it is almost always possible to find something that can be value-added to your products or services to win over the customer. Customers, like any other human, are considered to be predominantly emotional. Extending warmth, cheerfulness, friendliness, helpfulness and simply going the extra mile in terms of convenience, go a long way to win them over. Any business can differentiate itself by it, counting on it as a strong competitive advantage to stay ahead in a fast changing marketplace.
As we can see there are a lot of benefits a business gains by weighing options and making decisions from the value perspective. In part II we would be looking at how a business can deliver value as a competitive advantage strategy, potentially winning more customer business and thus increasing its share of the market as well as turnover.
If you have any examples on how this has worked for you or not, we would be glad to hear it. Please don’t hesitate to share with your network.
For in depth discussion on “Value Perspective” please check out my book “BEYOND THE PASSION” available in both paperback and ebook formats on Amazon, Barnes and Nobles, iBookstore, Smashwords and bookstores worldwide.We appreciate your comments, suggestions and contributions at any time. Feel free to SHARE this post with your network anywhere in the world.
If you haven’t yet got your copy of any of our books, kindly check them out – “Pitch Your Business Like a Pro”, “The Business You Can Start” and “You’ve Been Fired! Now What?” (Ebook edition – Itunes, Kindle, Nooks, Kobo).
To connect with me directly why not download my App (on your Android or IOS device) and be the first to share in our ‘Business Building Blocks’ tips. You can also connect with us via Facebook, Twitter and LinkedIn and sign up to our monthly newsletter for inner circle business tips on our website www.victorkwegyir.com.
In business, however, there is a trap I commonly find entrepreneurs fall into. It is assessing things based only on price or cost. This is something I consider limiting for any business owner seeking to become successful and remain in business for the long term. From the pricing of products or services to hiring employees to compete in business, value or perceived value has proven to be one of the best ways to measure the true worth of anything.
The difference between price and value is that price is the amount of money a customer pays for a product and/or a service. Value on the other hand, is the customer’s perceived benefits of that product and/or service. It is often about the emotional connection he/she has with the product and/or service, the employee they are dealing with, or the company’s brand value associated with it, in relation to the price.
The truth is that what you sell, as a business, must be good value if it is going to be the customers’ preferred choice over what exists in the market, because, most times, customers may not be fully aware of the true cost of production of the items they buy. They are therefore often willing to pay a price based on their perception of how much the product is worth to them and it is up to you to employ marketing strategies that create the right perceived value of the product to sell to them.
Having said that, there are a number of significant benefits that a business gains by considering the value perspective in its decision making and strategy. These include:
Value can help you to prioritize, by assigning different values to different activities. Assigning value to each task enables you to better assess what to take on board, what to delegate and even the order in which each task is to be dealt with as a business.
Value helps you to assess the true worth of a product line or service to the business and whether it is time to discontinue it or not. Because, even though the particular product line or service may be making a loss, it may be attracting other benefits such as driving in much needed traffic to the business.
Value is also a better measure of ROI than cost: profit ratios or margins. Measuring success by how much profit you make can be misleading, as it may lead to you losing sight of all the other non-quantifiable financial benefits of the business such as, customer perception of your products and services as well as the business as a whole. This often has a greater impact on long term business performance and survival than immediate financial gains.
Value also gives you more options to carve out a niche for yourself, thus offering you a better set of tools to employ in distinguishing yourself from the competition and making you more appealing to your target market.
Value ultimately can win you more business, much faster and more economically than most marketing strategies. Because thankfully, it is almost always possible to find something that can be value-added to your products or services to win over the customer. Customers, like any other human, are considered to be predominantly emotional. Extending warmth, cheerfulness, friendliness, helpfulness and simply going the extra mile in terms of convenience, go a long way to win them over. Any business can differentiate itself by it, counting on it as a strong competitive advantage to stay ahead in a fast changing marketplace.
As we can see there are a lot of benefits a business gains by weighing options and making decisions from the value perspective. In part II we would be looking at how a business can deliver value as a competitive advantage strategy, potentially winning more customer business and thus increasing its share of the market as well as turnover.
If you have any examples on how this has worked for you or not, we would be glad to hear it. Please don’t hesitate to share with your network.
For in depth discussion on “Value Perspective” please check out my book “BEYOND THE PASSION” available in both paperback and ebook formats on Amazon, Barnes and Nobles, iBookstore, Smashwords and bookstores worldwide.We appreciate your comments, suggestions and contributions at any time. Feel free to SHARE this post with your network anywhere in the world.
If you haven’t yet got your copy of any of our books, kindly check them out – “Pitch Your Business Like a Pro”, “The Business You Can Start” and “You’ve Been Fired! Now What?” (Ebook edition – Itunes, Kindle, Nooks, Kobo).
To connect with me directly why not download my App (on your Android or IOS device) and be the first to share in our ‘Business Building Blocks’ tips. You can also connect with us via Facebook, Twitter and LinkedIn and sign up to our monthly newsletter for inner circle business tips on our website www.victorkwegyir.com.
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