If you take the time to learn what your customers value and what they are prepared to pay for, you’ll be able to market your business more effectively and win new customers.
Customer value is the perception of what a product or service is worth to the customer.
This is the definition of customer value and it’s important to keep it in mind. The same goes for the following: customers don’t buy features – they buy benefits, goals and results. Most businesses make the mistake of thinking about value purely in terms of money. They create special offers to promote their products and services, but all they are doing is cutting their profit margin in a race to the bottom.
Adding customer value
As said, value is about more than just money. Your customers are seeking an outcome and this is what drives their buying decision. For example, an accountant might save a client £6,000 on their tax bill and charges £2,000 for doing the tax work. The monetary value to the client is, therefore, £4,000. But what if this is only the beginning? What if the client wants to grow their business over the next three years? As an accountant, you could add value by providing advisory services to the client to help them to achieve that goal. The client would be willing to pay for that additional service because it helps them to reach their objective.
“The client may value the convenience and efficient service to the degree that they may even be willing to spend more for that service.”
The experience counts
What also influences a customer’s perspective of value, is the experience. If an accountant is hard to deal with and difficult to reach, a client will not think that the service is great and may question whether it is worth the money. On the other hand, if the accountant offers meetings over Skype, at a time convenient for the client and provides documents by email with e-signature capability, the client may value the convenience and efficient service to the degree that they may even be willing to spend more for that service.
An excellent example
Amazon.com is an excellent example. The high street is struggling yet the world’s largest online retailer continues to grow because its customers value the convenience, the wide range of available products and the ease of buying. Amazon has aligned its business model with the values of its customers and that’s the reason why it continues to succeed.
Therefore, understanding customer value is essential for marketing your products and services more effectively.
Share this article