Strategies for Creating Superior Customer value

24/12/2021 0 By indiafreenotes

Providing useful products and services for your customers can encourage sales, improve customer loyalty and grow your brand’s reputation. Regardless of your position within customer service, marketing, web design or more, there are many strategies you can employ to enhance customer value at your organization.

Creating value for customers means providing useful products and services that customers consider worthy of their time, energy and money. For customers to find value in a product or service, its perceived benefits need to outweigh its cost. Creating value means maximizing benefits within an acceptable price point.

Benefits and cost are the two key components of customer value. Benefits can include aspects like quality, popularity, accessibility, convenience and longevity. Increasing your benefits without increasing your cost can raise the value of your product or service for your customers.

Step 1:  Understand what drives value for your customers

Talk to them, survey them, and watch their actions and reactions. In short, capture data to understand what is important to your customers and what opportunities you have to help them.

After figuring this out, you need to separate the value-generating activities from the wasteful ones. There are 7 types of waste in Lean and they are categorized as necessary and pure. The former support the value adding activities while the latter can only damage your process.

Understanding and identifying the value that your company brings to your customers will help you keep great connections with them. This way, you will be also able to boost the profits that your business generates.

Step 2:  Understand your value proposition

The value customers receive is equal to the benefits of a product or service minus its costs.  What value does your product or service create for them? What does it cost them–in terms of price plus any ancillary costs of ownership or usage (e.g., how much of their time do they have to devote to buying or using your product or service?)

Step 3: Identify the customers and segments where are you can create more value relative to competitors

Different customers will have varying perceptions of your value relative to your competitors, based on geographic proximity, for example, or a product attribute that one segment may find particularly attractive.

Step 4:  Create a win-win price

Set a price that makes it clear that customers are receiving value but also maximizes your “take.” Satisfied customers that perceive a lot of value in your offering are usually willing to pay more, while unsatisfied customers will leave, even at a low price. Using “cost-plus” pricing (i.e., pricing at some fixed multiple of product costs) often results in giving away margin unnecessarily to some customers while losing incremental profits from others.

Step 5:  Focus investments on your most valuable customers

Disproportionately allocate your sales force, marketing dollars, and R&D investments toward the customers and segments that you can best serve and will provide the greatest value in return. Also, allocate your growth capital toward new products and solutions that serve your best customers or can attract more customers that are similar to your best customers.