Tuesday, February 01, 2005

Value vs Benefit

Value is almost never just about price.

Value is always defined by those who use and/or pay for it. It's almost impossible to quantify because it depends on what trade-offs visitors impose. It is they who decide what value means to them and they who decide whether you actually provide it.

So how do you provide the value people want?

Value is always a trade-off between costs and benefits. The emotional benefits to a visitor inevitably outweigh the functional benefits (ie economic and psychological value compared with featurs and functionality).

Value cannot be separated from the end-usage context i.e. you can't separate the value of something from the context in which it is being used - if value propositions don't match this they become irrelevant.

Value is always relative to alternatives., which are not necessarily other products or systems, they could also be other ways of accomplishing the same or similar goals or doing nothing at all.

Value should also be grounded in the most obvious of basic business premises: the sole purpose of a company is to create value for its customers and to be compensated equitably for its efforts. Everything a company says and does should revolve around its customers, NOT its products.

Despite many companies' claims of being 'customer-focused', this is actually a radical shift in mind-set which few truly embrace - and subsequently suffer from the consequences.

(1 “Fundamentals of Value.” Mohanbir Sawhney. Net Gains, CIO Magazine. July 1, 2003)


Conducting business is still, as it always has been, fundamentally about PEOPLE

Any connection with any customer, prospect, supplier etc, across whatever channel they decide to use to communicate with you, should be fundamentally based on what each of your 'visitors' will ask or require of you before they feel comfortable taking action.

Any businesses persuasive process MUST begin and end with the visitor's point of view.

Get this right and the need for spending more and more time and money on branding, marketing, loyalty programs, advertising etc etc becomes much simpler because it becomes obvious and the very fact you are doing things the right way in the first place is very often all the marketing you'll need. Your visitors will do the rest of your marketing for you.

Look at all those companies who people rave to their friends, family, colleagues about because a) they were nice, b) they helped me, c) they've got really good products, c) they didn't charge the earth, d) they do things the right way.

They rave because they perceive a VALUE in the relationship they have with this company that matches their own needs and that they are happy to accept. A VALUE that puts that company way above their competitors. A VALUE that the customer has preceived as far greater than the alternatives.

This 'Perceived or even Real Value' is the one thing that will get your customers buying - and it aint all about price!
© 2006 by Nick Field

2 Comments:

Blogger Unknown said...

This was very well written and a very good read.

Tuesday, November 26, 2013 2:28:00 PM  
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