It is no secret that the main goal of many companies is discovering ways to provide value for the customer. Yet many still struggle to pinpoint exactly what that word value means. When customers evaluate a product or service they are really weighing its perceived value against the selling price. Ultimately if they determine the benefits outweigh the cost than a sale is made. There are four elements within the value pyramid including functional, emotional, social, and life changing. As humans, our needs range from the most basic (shelter, food, water, security) to the deeper and more complex (self actualization). Each day, we are constantly trying to meet both our hedonic (basic) and utilitarian (emotional) needs. When it comes to purchasing products and services, the amount of value we place on each of these elements varies depending on the current need we are trying to fulfill. For example, when shopping for toothpaste we are likely to value functionality and price because it is a relatively basic need. On the other hand, a sentimental purchase such as an engagement ring is going to be based more on quality and emotional appeal.
The objective for companies is finding a way to incorporate the perfect blend of these value elements into the specific products or services they offer. Successful companies know that along with achieving the right combination comes stronger customer loyalty, greater trust from customers, and ultimately an increase in sales revenue. Yet, the fact that each person has their own perceived idea of value proves to be a great challenge for many companies. However, it has been found that there are some elements which carry more weight than others. Listed below are 5 of the top ways companies can help provide more value to their customers.
1. Perceived Quality
At the top of the list we have perceived quality. This element influences customer’s decisions more than any other. There is a certain level of quality a product or service must obtain and anything short of that cannot be made up by other elements. Let’s keep in mind that quality is really determined by the customer’s perception. So identifying the exact wants and needs of your target market is key in order to provide the quality that they desire.
2. Pricing Right
Pricing is commonly seen as one of the most important elements when it comes to running a successful business. Price it too low… and your profit margins start to diminish. On the other hand, price it too high… and watch your sales revenue come to a halt. Using fellow competitor’s pricing as a benchmark and staying up-to-date on industry trends are both great ways to help you create that win-win price customers are looking for. Establishing a price that your consumers perceive to be fair while also maximizing your own profit is the gateway to success for any business.
3. Understanding Your Customer
How can you possibly expect to provide value for your customers if you don’t fully understand who they are? Defining your target market and truly understanding their wants and needs is a must. Now so more than ever, we have unlimited amounts of data accessible right at our fingertips. So why not take advantage? Gathering research, surveying, holding focus groups, and analyzing current trends are some of the many ways to help paint a picture of the exact market you are trying to reach.
4. Provide Convenience
Thanks to technology and our mobile devices life has never been easier for the consumer. Not only do we enjoy the idea of a product or service offering convenience but we have now come to expect it. If one business fails or lacks in providing a convenient experience customers will simply find a different company who does. Today speed is everything. If the transaction can’t be done instantly than consumers aren’t interested. Creating an easy, accessible, and accommodating purchasing experience is one of the best ways to provide value and maintain long-term customers.
5. Create an Emotional Experience
In recent years we have started to see a shift in consumer behavior and buying patterns. More so than ever there is a higher emphasis being placed on experiences and forming relationships with brands. Consumers are no longer solely as focused on the physical product. Instead they desire to form emotional connections with the brands and companies that they feel best represent who they are as a person. Therefore, one of the major ways in which companies can provide value is by building these relationships with consumes and creating a sense of community. Personalized selling has taken the place of traditional sales methods. Using social media platforms to help share your company’s story and engaging with people is one of the best ways to create customer loyalty. For today’s shopper, it is not just about the end product but the overall shopping experience. Finding ways to build an emotional connection with customers is by far one of the most effective ways to provide value.
Although the concept of value remains subjective, the elements in which it is made up of help to provide some clarity and understanding. Don’t forget, your customers are the ones driving your business. And, ultimately the ones determining your future success. By following these steps you can continue to grow and help keep your customers and your business happy!