VALUE IS THE KING OF BUSINESS
Last week, Rachitha, my daughter, came to me inquiring about my values, for her 10th grade assignment paper. Honestly, when I was her age in high school, I had no idea what ‘values’ are. Last summer, when I coached her and her brother on Youth Leadership, we touched upon briefly, on ethics and values but, I had no idea on what she knows further about values as a high school student. So, we had a little chat that also triggered more of my thoughts – not from a Leadership perspective but, more in how it plays a role in business – to write this article.
Value is Perhaps the Most Elusive Word in Business.
Everyone will tell you how important it is, very few can tell you what it is. If you ever talk to any sales person, you are bound to hear the words, “added value. (I recommend you leave them out of your sales lexicon forever.)
“Added value” has an evil twin: “value add.” Neither of which can be defined in terms of what the customer actually benefits nor profits from. Added value is usually some minor service or hard-to-define extra that the customer already expects, or takes for granted anyway. Things like: same-day shipping, or online ordering, or parts in stock, 24-hour service — those are not value — those are a given. Those elements are expected.
In order for you to understand the word “value” as it relates to your ability to managing a business, put the word “perceived” in front of it. If you think it’s valuable, and your clients do not perceive it to be valuable, it is NOT a value for them.
Your client is looking to increase their business, their customer loyalty, their employee loyalty, their productivity, their morale, their profit, and to have no problems. Are those the values you bring to the table? Those are the value elements that any customer would consider worthy of the word.
The Value is Missing from the Mission.
Most businesses have a meaningless mission statement that was created by a marketing department. It’s all about being number one, exceeding customer expectations, and building shareholder value. What you need is a value proposition and a value statement that explains fully how you help others, how they win, how you serve in terms of the customer, and how that leads to loyal customers and referrals.
And a mission statement that matches it. A value proposition states what you do in terms of how a customer benefits. For example: You might say, “We provide 24 hour service response.” A “value proposition” way of stating the same thing is, “when equipment is broken or needs repair, production stops. That’s why we instituted 24 hour or less service response. That way there is minimal loss of productivity and job profitability.” Same words, stated in terms of how the customer wins.
Value is important to a prospective customer for three reasons:
- It differentiates you from the competition.
- It gives the customer understandable reasons to do business with you.
- It gives the customer the peace of mind they need to move forward.
Value is important to an existing customer for three reasons:
- It builds real relationship. One based on value.
- It makes repeat business more automatic and one step ahead of starting over.
- It eliminates competition.
Most competitors thrive on “saving a customer money.” Customers don’t want to save money as much as they want to grow their business and make more profit.
At the end of any business transaction, or when an existing customer has a need, that’s when “perception of value” plays its heaviest role. If the customer perceives a difference in you, and perceives a reassuring value in terms of how he wins, you have a business deal. If not, they go to another business with the lowest price.
Lowest price always means lowest profit. The more you become proficient at stating value in terms of the customer, the more it will be perceived as value by the customer. The more you put value in terms of how they win, how they profit, and how they grow, the more it will be perceived as true value, or real value.
And in the end, the value that you receive back will be the order. That’s value for you.