One of the trendy words nowadays on marketing is “value”, but what is value? It may be conceptualized as the relationship between the consumer‘s perceived benefits in relation to the perceived costs of receiving these benefits. It is often expressed as the equation:
If we apply simple math to it. Value can be bigger, smaller than 1, or simply 1. What does all this mean? If we have a product where the benefit is smaller than the cost, we will have a number between 0 and 1, meaning that product is overvalued or overestimated (risky bounds.) If the relationship is bigger than one, then the product undervalued or underestimated. (expensive bounds.) And if the the relationship is equal to 1 means that we have reach the sweet spot. Most of the companies try to be either around 1 or bigger than 1. The key here is to increase our value and tip the scale on our benefit.
The 4 most common ways to add value to your company are:
- Products that perform: To develop a product that works. If you ask few Apple fans why they like it so much, they say… “because it works.”
- Exceed expectations: In order to reduce the cognitive dissonance, you need to be sure that you can pass the expectations that the customer has set when he decided to buy something from you. Nothing wrong with going the extra mile.
- Give guarantees: If it breaks: Turn the other cheek, answer the phone, replace the broken product, and give them a reason to comeback. This is your chance to turn a bad experience into a great one and increase the loyalty of your client.
- Build Relationships: Love your clients be a farmer, cultivate relationships with providers, clients and within your company.
If we follow this 4 simple rules, we can become on a stronger company, differentiation is huge! Learn from what the others are doing wrong and take advantage of that.
Aldous Huxley said “That men do not learn very much from the lessons of history is the most important of all the lessons of history.”
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