One Simple Strategy to Add Value to Customers in Meaningful Ways

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:

• Aligned is a podcast for executives of emerging middle-market companies and executives pursuing growth and looking for new levers to pull. 
• Read more about cognitive marketing on FitzMartin’s website.
• Order Sean’s book Shift.
• To connect with Sean Doyle, find him on LinkedIn, or learn more about FitzMartin on the company web page. 
• Adam Smith’s An Inquiry Into the Nature and Causes of the Wealth of Nations examines the relative exchangeable value of goods.