A successful business is based on quality customer value. In order to understand this you need to accept the reason why customers purchase goods and services. They don’t do it because they don’t know what to do with their money or because they’ve heard that the owner is a nice person. Customers buy products and services based on the advantages that those products or services give them. In simpler terms they buy things that improve their life. That being said we can all agree on the fact that a business is an activity that creates value. In today’s article we will focus on customer value creation.
Understanding customer value
An entrepreneur defines his products or services based on their features and characteristics. On the other hand, a customer defines a product or services based on the advantages that it brings to him. It can also be described as an analyses between benefits and price. If you convince your customers that the benefits that come with a product are more valuable than the money spend for acquiring it then you will manage to create value.
The difference between value and price
Given the fact that our economy is currently struggling, a lot of companies are making the mistake of focusing on small prices instead of the value that they create. Having the smallest price on the market for a competitive product can be a strong advertising tool. However, if that product fails to deliver value, the customers will soon seize to be impressed with the small price. Believe it or not, most customers value quality a lot more than the small prices. Therefore in order to be a market leader you need to have the highest customer value creation. This means that if you convince your clients that your product will bring them the most advantages, it won’t matter that it is slightly more expensive than the products of the competition.
Understand your customers
It is very important for an entrepreneur to be able to have an objective opinion on his or her products. Most business owners think that they have the best products therefore they find it hard to believe that the customers won’t share their opinion. If you manage to make yourself see through your customer’s eyes you will have the best tool for customer value creation. Once you manage to understand them you need to focus on bringing them satisfaction. Customer satisfaction is a marketing concept that refers to a company’s ability to meet the customers’ needs.