Consumers are constantly on the lookout for value with their purchases. Meanwhile, business owners strive to provide great value with the products and services they sell. The word value is not one to take lightly as the perception of value that you deliver can determine your overall business success. Therefore, it’s in the best interest of business owners and professionals to truly understand the meaning and relevance of value. So just what is value? How do you create it? Sustain it? And, add it to products and services in support of business success?
The word “value,” (noun), dates back to the 14th century. Its literal definition is:
- a fair return or equivalent in goods, services, or money for something exchanged
- the monetary worth of something, or market price
- relative worth, utility, or importance <a good value at the price>
- something (as a principle or quality) intrinsically valuable or desirable <sought material values instead of human values — W. H. Jones>
The definition of the word value has evolved over time to mean “worth and high quality” including “to be of worth” or “strong.” In marketing, value can be defined as: the mental estimation a consumer makes of a product. Value — perceived or real, personal or business — is the only thing that separates one product or alternative from another. ‘Value’ is our client’s perception of the impact a solution will have on their business issue. It’s always a combination of tangible and intangible components. It’s always subjective and unique to our client.”1 According to Peter Doyle, Raquel Sanchez-Fernandez and M. Angeles Iniesta-Bonillo, “…value may be conceptualized as the relationship between the consumer’s perceived benefits in relation to the perceived costs of receiving these benefits. Value is often expressed as the equation:
Value = Benefits / Cost
Doyle, Sanchez-Fernandez and Iniesta-Bonillo go on to suggest that “value in marketing can be defined by both qualitative and quantitative measures. On the qualitative side, value is the perceived gain composed of individual’s emotional, mental and physical condition plus various social, economic, cultural and environmental factors. On the quantitative side, value is the actual gain measured in terms of financial numbers, percentages, and dollars. For an individual to deliver value, one has to grow his / her knowledge and skill sets to showcase benefits delivered in a transaction (e.g., getting paid for a job). For an organization to deliver value, it has to improve its value: cost ratio. When an organization delivers high value at high price, the perceived value may be low. When it delivers high value at low price, the perceived value may be high. The key to deliver high perceived value is attaching value to each of the individuals or organizations—making them believe that what you are offering is beyond expectation—helping them to solve a problem, offering a solution, giving results, and making them happy.Value changes based on time, place and people in relation to changing environmental factors.”
All business constituents perceive value in your business. This includes, but is not limited to, customers, partners, investors/shareholders, employees, and suppliers. Value usually determines whether a business constituent/stakeholder will decide to and/or maintain doing business.
Do you sell value with every interaction? Here are a few tips to help sell value:
- Understand your business’ benefits and competitive advantages: Revisit the benefits and list them in order of priority. Where do you provide more value in these benefits as it relates to cost compared to your competitors? Also, is your value defendable?
- Know your customer’s needs and definition of value: What’s valuable to one segment may be different from another. Understand what is perceived as high-value among your target customers. Align their needs with the value you are offering.
- Know your competition’s value proposition: Be sure to know exactly what their costs are, the services and products they are providing for that and how “they” sell value.
- Start with value, end with costs: Every sales conversation that starts with price, usually stays focused on price. Control the situation so you can sell value first and then end with price. Every infomercial ends with an amazing price as well as a “Wait, there’s more…” AFTER they’ve sold you on the value of the product
- Make value a part of your corporate culture: Weave your value into all functions of your business. Make it a part of your brand. Tattoo it on documents and tell the world.
The more conscious you are of the value you’re selling your customers compared to the alternatives the better chances they will perceive yours as being worth more.
3. Peter Doyle: Value-Based Marketing: Marketing Strategies for Corporate Growth and Shareholder Value. Wiley, 2000.
4. Raquel Sánchez-Fernández and M. Ángeles Iniesta-Bonillo, “The concept of perceived value: a systematic review of the research,” Marketing Theory 7 (2007), 427-451
About the Author
Angelo Biasi is General Manager of SMART Marketing Solutions, LLC, a leading full-service integrated marketing company in Naples, FL since 2001. He has helped create and execute marketing plans and integrated marketing solutions for companies such as Playtex, Bic, Rogaine, Tauck, and over 35 colleges and universities, to name a few. Angelo has an MBA in Marketing from the University of Connecticut and has taught Marketing at New York University for over five years. For more information or to learn more, email him at abiasismartmarketingllccom (abiasismartmarketingllccom) , visit www.smartmarketingllc.com or call 239.963.9396.