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Sean Doyle | One Simple Strategy to Add Value to Customers in Meaningful Ways - 019

Aug 3, 2021

ALI 19: One Simple Strategy to Add Value to Customers in Meaningful Ways

Keywords: provide that value for clients and customers.

 

Today’s episode of Aligned is all about one thing: value. But what does value even mean? From a practical standpoint, value leads to increased margins, more effective sales, and increased revenue. But value isn’t just practicality; there’s a depth involved. And on today’s episode of Aligned, Sean dives into the meaning of value and how to provide that value for clients and customers.

 

Defining Value:

  • From a customer-perceived value framework, value is the difference between a prospective customer’s evaluation of the benefits and costs compared to others.
  • There are four categories of value: functional, monetary, social, and psychological.
  • While it seems like a simple word, value has nuance. Its basic underlying concept is meeting the needs of an audience, whether those “needs” are wants or demands.

 

The diamond water paradox:

  • Things with the greatest use have little (or no) exchange value. Conversely, the greatest exchange values often have little use.
  • Adam Smith’s An Inquiry Into the Nature and Causes of the Wealth of Nations examines the relative exchangeable value of goods by defining two value perceptions: the value in use versus the value in exchange.
  • A simple example: nothing is more useful than water, but it costs nothing. Alternatively, diamond has little practical use but is an expensive commodity.

 

The value triad: 

  • There are three ways we can offer value to the customer - revenue gain, cost reduction, and emotional contribution.
  • Many B2B companies prioritize cost reduction. But because of that, most B2B businesses can grow by understanding the applications of emotional contribution and how to deliver it to customers.
  • Looking at emotional contribution, we realize things that don’t raise revenue or lower costs are still valuable.
  • Value can present itself as social power; it could be a service offering, the product packaging, the installation, the services delivered, or even the intake model.

 

A quick story:

  • A purchasing manager is talking to a potential buyer who wants to demonstrate to his senior leadership that he’s contributing to the business.
  • People in these positions are under pressure to complete transactions quickly and efficiently yet are blamed when something goes wrong. And their diligence and understanding typically get little recognition.
  • If you can help the purchaser get out of a rut, get a visible win, and gain the attention of their bosses, you’ll make a huge emotional contribution (and thus provide value.)



How can you add value to your clients? Integrate value mapping. 

  • There are three potential aspects to a buyer’s behavior in the cognitive marketing model: financial pain, strategic pain, or personal pain. (The previous example would be personal pain.)
  • Strategic pain has nothing to do with the dollars of the widgets or the amount spent per hour; it’s how you strategically add value to the entity.
  • If you’re selling your products and services on an input basis (using the labor theory of value), try shifting that thinking to an emotional contribution model.
  • You’ll understand why that person is buying from you and what that buyer is doing as a company. This lets you sell based not on inputs like labor, but the value labor provides.
  • The key takeaway? Don’t immediately look to reduce cost or promise revenue. Instead, provide emotional contribution in quality or services, social recognition, and even marketing leverage.

 

Episode Resources: