The Australian marketplace is changing, and it is changing rapidly. Now more than ever, we are expected to be doing more for less; see more clients, get more business and achieve higher profits, all for less money and even less time.
This is a reality we cannot escape but are often left clamouring to deal with.
How is it possible to achieve what the market demands when there are so many demands on our own time?
A simplistic answer is value proposition. In an overarching business concept there are many things to take into consideration, however one aspect which is easily within the control of the organisation is value.
This is value to your staff, value to your clients, and value to the marketplace in general.
Value is often seen as a marketing term, but it is a term all in business should embrace.
Market research has determined market share is pursued and defended constantly. It is no longer as simple as competing on price/cost alone, if this was the case, there would be many more successful business out there.
While it may be a term relegated to the marketing department, value is something all business should be looking at to grow their client base and to retain clients. Value is something which will set you out from your competition, and will allow you to potentially generate more revenue for less cost.
Value is determined by perceived value
Many people are happy to pay more for a designer watch, rather than a cheaper looking watch in a chain store. Watches work the same, and there might be a slight change in overall quality of the product, but not enough to justify a 400% (if not more) mark-up. We are paying for the perceived value.
We perceive the designer watch is better than the cheaper watch, and we are happy to pay a premium for this.
This is a basic analogy, but is something all businesses can take on board. For some businesses, their value will be in their volume of sales (and not necessarily a higher cost) but this is something which may allow you to set yourself apart from your competition.
Monetising value to your clients
If monetising value was easy, everyone would be doing it. It’s not quite as simple as telling your clients you provide better value than competitor A, you have to demonstrate this to your clients.
How can you demonstrate value?
The easiest way is to offer your clients something they cannot receive from a competitor. For a car company, it may be fixed price servicing and a courtesy car for all services; for a financial services company it may be a value-add such as Cash Flow Management, or the ability to offering bill payments as an enhanced service.
As I have said in previous articles, this is something clients are also willing to pay a premium price for.
Value can build loyalty which can build profit
Attracting new clients can be up to 7X more expensive then retaining current clients. If this is the case, why do we spend the majority of our time looking outward to attract new clients, rather than spending time to add value to the client experience for our existing clients?
Shouldn’t we, as organisations, be looking for solutions which provide value at little-to-no extra cost? While it may take a little time to implement, putting in the effort to create a value proposition for your client is worth the extra effort in the long run.
Providing value is not always easy for an organisation, and you may be lost as to where to start. However, if you look internally and search out gaps within the organisation, it should be relatively simple to determine gaps within your product offering. You can look to your competitors to see what they offer to their clients and see what you can offer which is similar, if not better.