The essence of value
Anyone can set up a business venture. What separates one from the other is the true value that they are offering. The essence of value in a business goes a long way in helping you grow and sustain your business. What are you offering? Is your offering important to your customers? Why would your customer buy from you and not from a competition? Are your services or products long-lasting? Useful? Unique? These are questions worth asking and answering as an Entrepreneur/Business owner.
Value can be defined as the monetary worth of products or services but I would like to define it as the importance, worth or usefulness of products or services to customers. Why? This is because there is a direct link between one having to part with money for a product or service and why they would come to that decision to part with their money for a product or service. Value is perceived.
The aim of every business is to make money. In other to make money, there must be an exchange of value, i.e. money for a product or service. Money in economics will always be a limited resource and money is often spent according to one’s scale of preference. For customers to part with their money for a product or service, they must perceive great value. That is why Starbucks will sell a cup of coffee for $2.50 that others will sell for $1. This is because they understand a customer’s perceived value for their product and service. They have created a unique perceived value for their product and service and this is simply in the Customer Experience. When you walk into a Starbucks Café, the ambiance of the café wows you, they offer a variety of coffee and other products, their customer service is great and they have that general connection with you as a customer. They don’t only sell their product, they sell value to you.
There are different kinds of businesses with their product/service offerings and values respectively. You have to know the genre of your product/service and create value accordingly. Some products/services like Spa, Valet, Cars, Holidays fall under the luxury genre and value must be created accordingly. When you sell luxury, make sure every step or process that will lead to a customer parting with their money depicts luxury. For example, walking into a luxury brand store like Louis Vuitton, the store ambiance, the personal assistance and products all depict luxury. They go up to the extent of serving you Champagne or sparkling water when you are about to pay! Take extra steps in building great values for your offerings that would make customers part with money and also return.
You may have to merge products or services to create an important value for your offerings. For example, pillowcases and bedspreads. Pillowcases on its own, on a store shelf, are certainly not valuable. Very few people will set about to pick up only a pillowcase even if that is all they need. A full bedspread plus pillowcase has more value than a pillowcase or bedspread individually. When you pair them with bedspreads, they become valuable and customers will pay more. This pillowcase and bedspread example fall under home and furniture genre, bought once in a while. Some products/services are not needed by customers regularly but you want to create that impressive value for the product/service that would make that customer return even after a while.
Businesses like food and beverage are necessities and the necessary values should be given. Why do people eat? From research, some people eat because they are hungry, while some eat to nourish their bodies. If you are in the food industry, you have to make sure your customers get value for their money, e.g. they should get reasonably sized portions. Quick Service Restaurants (QSR) should give values in line with speedy service. QSRs should choose to work on the packaging (takeout) materials that their customers will happily take out to eat. Proper Restaurants will fall into a different genre and generally, their customers are not exactly looking to get filled. They are looking to get a great ambiance, international chef standard meals and somewhat of a customized experience.
Take note of consistency. That is another way to give out value. Some customers only need consistency. They want to buy that same product/service every time they want it and the same way they had it earlier. I have bought a couple of items from businesses around. Some I never visit afterward, some a couple of times after and some, every time. If you spend money on adverts and use gimmicks to get customers to buy and you don’t offer a great value, it will be wasted money and effort because customers may never return. Just as it is important to write out your vision, it is important to know the values you are offering and indulge your customers in it.