The Truth About Value
Not all customers are created equal. I bet you can immediately think of the customer you dread to see and then one that brings you joy to be in business. Despite these two differing emotions the results and relationships you get from each are equal on this one trait.
Your ability to communicate and deliver value consistently matters to your customers.
Delivering value is one of four critical success and customer growth drivers. It determines your influence, reputation, position, authority and ultimately your growth to managing successful customer relationships.
What value means to you and your customers is often different.
If you don’t yet have a clear view of how you want to be delivering value to your customers, and how to provide it so it gives you an unrivalled advantage in your market then keep reading…
Getting value right will transform the way your organisation’s perception, experience and investment is viewed by your customers.
Although we hear the word value all the time, it is not clearly quantified. Value can feel philosophical and vague. At its core, value is:
Your ability to provide a relevant, sought after personalised outcome that delivers a specific result, based on the present and future practical and emotional needs of your customers.
Before we break this down, it’s important to know that value is a moving entity the customer owns. It is they who determine its benefit based on their current circumstances.
I saw this with one of my own customers from a medium-size manufacturing business in the UK. Their clients’ use of their services and products had changed over time, including the purchasing quantity. I worked with my customer to understand the change. We asked some really specific questions:
- How relevant is the solution today based on when we started working together?
- How has the use and engagement of the solution changed for you in the last 12 months and why?
- What specifically have you and the business noticed about the change of use?
I was shocked at the wide variety of answers. The one element that remained consistent in responses was that the same perceived value at the time of purchase had changed. The value sold to them at the beginning helped them at one phase of their business. But as their business pivoted, the service didn’t.
They had bought what they thought was being delivered but not what was really being offered. My customer just didn’t see it.
This was a game changing revelation for me as it pointed out the clear fact that perceived value is not static but a moving entity.
Delivering value is much like taking aim at a moving target. It is only once there is a clear view that we can take the shot. All too often we take guesses and make assumptions, only to come up empty.
This may be the reason why some customers don’t buy anything different or buy more of what they already have.
As we get to know and understand the needs, goals, concerns and desires of our customers we will become more influential. We’ll become masters of delivering true value that is highly appreciated and sought after.
Value Saturation Effect
Imagine you’ve just purchased a brand new set of mobile phones for your business. These are the most current, equipped with all the features and specs you need today. Everything that you perceived is offered.
A year later and things have changed. The way in which you now use mobile phones has changed. You’re working offshore and need phones with a different kind of coverage and features. You’ve seen no reasonable next step or improved features that would help, this is despite seeing the competition improve their options.
Renewal time comes and you get a call from your provider. They offer to renew your phones or give you newer models at the same price.
How excited would you be for that offer?
As simplistic an example as this is, customers today may be experiencing this from you or your company. Customers are being asked to pay for the same service each year that isn’t what they need anymore. They may only be buying again for ease and expectation.
As humans we love safety but self-interest is a much stronger driver. Eventually, something kicks in which I’ve called the Value Saturation Effect™.
This is where the perceived value and effectiveness of your product or service at the time of purchase is viewed as less valuable over time, especially when no improvements or advancements have been made. The impact of this is:
- Loss of credibility with the customer.
- Potential loss of sales.
- Loss of competitive advantage.
- Failing to protect your value.
To prevent the Value Saturation Effect™ from happening you need to challenge the perceived value at different points in the life of your service or product; during purchase, integration, use and re-use.
Value Perception Gap
The diagram above shows the four stages where specific value is needed throughout the onboarding of a customer into their use of your service or product. These stages are also the time when you need to have a laser focus on delivering value to your customer. Your customer’s needs and priorities will shift; mergers happen, departmental changes, market disruption or a key contact leaves the business.
We need to be aware and ready to adjust our customer conversations to be sensitive to these inevitable shifting situations. Ask the right questions, speak to end-users and seek to better understand where the challenges could be upfront.
In doing so you’ll be in a much stronger position to anticipate potential challenges and more prepared to adjust when new information arises, enabling you to keep the perceived value of your product or service high.
No one wants a customer who simply sits on the status quo even if it’s your product or service. This will lead to restlessness, and the ultimate question: “Why are we still using them?”
The whole concept here is to understand that what is important to your client today may not be the same tomorrow, in three months or a year from now. Start taking note not only on what your product or service does but also what your customers might need from you today, tomorrow, in three months or a year from now.
How to Master Value
Mastering value begins with understanding how to activate the Value Delivery Pillars and Value Disciplines.
Value Delivery Pillars
Value delivery pillars are the areas in your business that are working right now, intentionally or unintentionally, to shape and reshape your customer relationships.
We can see these pillars in action when you evaluate the value chain of an organisation.
In most organisations, we don’t think about value as individually connected areas that we can influence. Value can dramatically transform the way we engage with and deliver results to become insanely attractive to our customers.
The four observable value delivery pillars are:
- Value Adding – What you do with your products and services to help your customers gain a result and or eliminate pain.
- Value Creation – Identified and designed insights from the knowledge of your customers, their market and goals allowing you to deliver unexpected benefits.
- Value Realisation – The effective use and management of resources enabling the full value of your services and products to be delivered.
- Value Elements – The inclusion of specific psychological, emotional, practical and philosophical distinctions, that greatly improves the perceived benefit of a specific product or service.
The power of these four pillars cannot be understated and you should look out for my next blog to read more.
The value delivery pillars are very important to understand, but how we think about the delivery of value matters even more. Its delivery is highly dependent on four value disciplines.
Value, when positioned effectively, needs to be:
- Strategic – Fit with yours and your customer’s overall goal.
- Contextual – Be relevant to a customer when they receive it.
- Personalised – Be ready to take action on, and communicate.
- Empathetic – Meet a clear internal and external need.
The quality of the value you deliver is equal to how clear you are about the result you want, and how well you apply the four value disciplines.
Let’s explore these value disciplines.
Value Discipline One: Strategic
Fit with your and your customer’s overall goal.
Consider these three questions:
- What value do you want to create for your customers and why?
- What measures do you use for delivering value to your customers?
- How do you know that you are delivering value to produce the results you want?
If you’re unsure of the answers to the questions above, or simply didn’t consider them, well now’s your chance. In your organisation, you want to know that what you deliver for your customers will meet the goals you have and the goals they want.
- Do you want to increase the number of employees using your product or service so you can build better relationships?
- Do you want to reduce the amount of time taken to onboard a customer to use your products and services?
Articulate exactly what it is you want by going deeper in your customer conversations.
Ask yourself what really is the actual goal for your customers emotionally, financially, relationally, practically or more. Answering these will help you to determine what value delivery pillars you can activate more of, align to or improve further.
Value Discipline Two: Contextual
Be relevant to a customer when they receive it.
Now that you know what value you want to deliver to your customers based on an aligned goal, you need to get an understanding of their context.
The best ideas applied at the wrong time can be equally as bad as a poor idea at the right time.
If we’re not paying attention to what is relevant to the customer you’ll be constantly frustrated with customers saying no or worse still being undecided.
Let’s imagine that you want to increase the number of employees using your products and services. Your customer gains their value as they want greater internal alignment and adoption to get more immediate benefits from your product.
Even if you know what needs to be done you still need to understand the context of your customer. Do you know what is happening in their business? Having this information will help you understand how to deliver value.
Let’s see two scenarios:
Scenario one: Your customer is going through lots of hiring and they feel overwhelmed with the workload.
Scenario two: Your customer has a key person leaving that is responsible for managing your product or services in their business.
You want to achieve your goal but both scenarios carry very different implications and opportunities.
Here are four questions to kick start your thinking:
- How does the current context impact my contacts today?
- How might this impact our relationship together?
- What might I need to understand more of?
- What is the action I can take today?
All of these questions help to understand what’s happening and feed into the other disciplines.
Value Discipline Three: Personalised
Be ready to take action on and communicate.
How easy is it for us to throw around acronyms or names of products that we know well but our clients have no clue what we’re talking about? The answer is very easy and it happens all too often.
The power of delivering value for others is about clarity and importance. But why does this matter?
When a customer comes to you they’re demonstrating trust in your judgment. You, in return, should honour that trust by being clear with them about how best to use the advice you’ve given and why it makes a difference.
Be careful as this is not about preaching a particular way of living. It’s about clarifying why the advice you’re giving is important to solving their current problems and potentially their future challenges. This makes it clear how and why you are delivering value that matters to your customers.
Some possible solutions are:
- Identify the typical problems and solutions you provide.
- Create a simple four-step action card for each customer showing how to get the maximum benefit from the product or prevent a problem should it be used.
- Make sure what you do fits with the overall strategic goal of your customer and their organisation.
Value Discipline Four: Empathetic
Meet a clear internal and external need.
We know through the multi-disciplines of behavioural psychology that we genuinely look for connection and meaning in all our engagements. We’re literally wired to connect.
This might seem like an odd thing to include when thinking about value, yet empathy sits at the centre of the four value disciplines. That is because it’s about building trust.
Customers need to believe that what you’re doing is really in their best interest and will also matter to others.
Dr Amy Banks – Neurobiologist and Director of Psychiatry at Harvard says:
“Neuroscience is confirming that our nervous systems want us to connect with other human beings. A good example of this is mirror neurons, which are located throughout the brain and help us read other people’s feelings and actions. They may be the neurological underpinnings of empathy – when two people are in conversation they are stimulating each other’s mirror neuron system.”
Here are two simple but powerful psychological ideas you can use; Certainty and Significance. Using these will give your customers confidence that you’re on their side and that you actually care.
Here’s an example of these two in action.
A customer in the insurance industry I worked with was having trouble with a handful of clients in the healthcare sector due to the very complex changes in the industry. The legal policies became highly detailed, complex and confusing. The result was long delays in decision making and sometimes loss of customers.
Only 8% of new customers would agree to the new terms; this was a problem.
Instead of working hard to sell the purpose of the new policies and why they were so dense and complex, we created a “Risk Document”. It was a simple one-page document outlining the risks should either party make an agreement. The outcome would be the same anywhere in their market.
The client didn’t know this. They believed the risk to them was much less than the insurance company who could also more easily assess if it was right for them.
My customer went from 8% of clients to 68% of clients signing up in 4 months.
Apply empathy. If needed also show your cards by making your intentions clear.
Before you craft the next message to your customer, consider your strategic goal and the kind of value you want to deliver. Use the four value disciplines and prepare to deliver value for results.
- Be Strategic.
- Be Contextual.
- Be Personalised.
- Be Empathetic.
If you resonate with this content and would like to know how you too can master value in your business, get in touch or join our mailing list.
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