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Practical Help to Grow Your Business
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The Concept of Value - Part 2 |
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What Is Value?
Just as there are 4 Ps of Marketing, so there are 5 Cs of Value:
- Comprehend - The value to the customer
- Create - Value for the customer
- Communicate - Value with the customer
- Convince - The customer that the value is worth paying for
- Capture - Your share of the value - Using a value-based price; not one based on cost or effort
“Comprehend, Create,
Communicate, Convince and
then Capture your share of
the value”
Comprehend, Create And Communicate Value
Most customers have no incentive to capture data on the value your work will deliver - Largely because they buy what you do infrequently.
But you sell frequently, so you need to develop the skill and competence to comprehend, create and communicate value - It must be a core competency across your company, the ability to help the customer understand value for themselves. Another of the most important points in the concept of value!
“Develop the skill and
competence to help the
customer understand value
for themselves”
A Big Impact On Your Marketing
When we make a purchase, we consider value, not the product itself. We deliberate on what the product will do for us. Mostly this is anything but obvious.
Consider what marketing impact you would make if you made this obvious! Don't complain that your customers don't understand what you do. It's your job to make it clear to them, so they do!
“Don't complain that customers
don't understand you. It's
your job to make it clear to
them!”
Help Your Customers Understand Value
You have to help your customers understand value, and to do this you must understand why they chose you and choose to stay with you.
Your value proposition is the entire set of resulting experiences - Some elements may be inferior to similar elements in other offerings, but it is the overall package that wins.
Beware of the tendency to focus on internal stuff that's of no consequence to the customer. Customer experiences generally revolve around Quality, Price, Service and 'Intellectual Capital'.
“You must understand why they
chose you and choose to stay
with you”
Service And Intellectual Capital
By emphasising total quality service and transformation, you offer a superior value proposition, thus enabling you to make more profit. Because the 'customer surplus', the gap between the price you would have charged and the full value perceived by the customer, grows as perceived value grows, you can capture more of this by raising the price you quote whilst maintaining the customer's return on investment.
“Customers actually aren't price
sensitive - They're value
conscious!”
Intellectual Capital, for the customer, is the gain they will make in skill and experience as a result of working with you. Social Capital - the value in your customers, suppliers, vendors, networks, referral sources, alumni groups, joint ventures, alliance partners, professional bodies, reputation and so on - is the least exploited form of Intellectual Capital, yet is the most highly valued by customers.
Customers actually aren't price sensitive - They're value conscious!
 
Copyright ©2011 David Winch
All rights reserved. |
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