From correspondent, business strategy consultant and small business start-up guru, Anthony C Taylor comes an interesting insight into the way we perceive value. Take a look:
Last week I was meeting with a client and we were chatting about the different reasons that people came into her clothing store.
We were chatting about her different employees and that interestingly enough they each had their own sub section of clients.
I proposed that different clients had different reasons for coming to her store, and it varied depending on the employee and the service that they received.
Different clients got different value from the different employees in addition to the value that they received from the store itself.
You've probably heard about Porter's Value Chain: the sum of all businesses activities that in one way or another create value for the client.
I use a simpler value chain model that takes the 4 key activities of your business:
And breaks them up into individual activities that create your business model.
(For more on this you can visit the business model canvas)
Everything that you do in your business creates Value.
"Price is what you pay. Value is what you get". - Warren Buffett
You've heard about Unique Value Proposition (UVP or USP)
What should people buy from you?
Why do they buy from you?
Is it convenience, is it service, is it price, is it because you have warm cookies in your lobby? (thanks doubletree)
It's all of those things combined (and then some) that create your value and your competitive advantage.
For emphasis: Your unique value is your competitive advantage.
It's what makes people buy from you instead of your competitors or alternatives.
Back to value: It's only valuable if someone values it.
I frequently use organic food as an example of this.
Some people think organic foods are worth the price premium, and some don't.
"Organic" (and all that entails) is not valuable to everyone.
If they are willing to pay the extra, they value the "value" of organic.
As part of your marketing, you're only going to attract the people that value your value and that believe that your product offers more value than the price they're paying for it.
You buy Volvo for Safety
You use Fed Ex when it absolutely, positively has to be there overnight.
You get your house painted by Wow one day when you want your painting done in a day.
If you don't care about these specific values, you may go with an alternative, or you may purchase them for a totally different reason.
Is the beer you buy at the Liquor store any different than the one you buy at the hotel bar?
Why is it 5 times the price then?
What's the value you get from the hotel vs drinking it at home?
Think about your own business:
What's your Value?
How does your value differ for different customers or clients?
How does your value differ and compare to competitors and alternatives?
How can you add more value to your business processes and transfer that value to your customer to warrant a higher price or a bigger market share?
Remember, it's only value if your customer values it.
If you don't know what your customers value, just ask; You might be surprised with the results.
About the author: Anthony is a respected business strategist who works with business to ensure success. He helps you figure out what your value is, or to figure out ways to increase that value for your consumers
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