Every business has a Unique Value Position whether they realize it or not.
The battlefield for this position only occurs in the client’s mind and is
different from person to person. It is important to understand what value
is and how crucial it is to create a marketing message that establishes your
Unique Value Position in the market.
Value is defined by
the client
Value is and can only be defined by those who use and those who pay for it.
To understand the true nature of value, you need to get inside the minds of
your clients and think like them. Often, value is a moving target.
Everyone’s situation in life changes almost all the time; economically,
socially, and emotionally. With these changes, the importance of certain
values evolves throughout their lifetime. People assign value differently
when they are 70-years old than when they are 18-years old.
Value is ambiguous
Value is very difficult to quantify - you need to understand all factors
that clients take into consideration when defining what is valuable to
them. It is critical to realize the relative importance that clients place
on each factor. Without understanding what these factors are, you are
shooting in the dark. Once you pinpoint the factors that clients consider
when making decisions and how they make trade-offs, you can develop a better
understanding of how your Unique Value Position will appeal to them.
Value is emotional
A
common mistake in business is that decisions are made solely on functional
worth - a product's features and utility. Value has two other dimensions as
well: economic value - what these features and functions are worth to
customers in terms of time and money; and psychological value - the
emotional benefits that customers get from your products or your company.
Within both of these lurk many emotional triggers such as prestige,
simplicity, acceptance, pride, security, fear, desire, safety and many
others. People will say they make rational decisions when they spend
money. But research has shown that it is impossible to make any decision
without emotion playing a major role.
Value is a trade-off
Value is the perceived worth of something in relation to the total cost that
clients pay for it. It is a trade-off between costs and benefits. As
humans, when we are given choices, we deselect rather than select items.
‘Is it worth the money,’ we ask. We are trading the perceived value of one
characteristic for the perceived value of another. No product is every
perfect and we typically assign a value to something based on our previous
experiences or the opinion of someone else.
Value requires context
You cannot separate the value of something from the context in which it will
be used. Unless you understand the desired outcome of the client, you run
the risk of creating value propositions and offerings that are irrelevant to
them. A person who loves to drive fast will pay more for a sports car than
someone who needs to deliver children to baseball practice. It is a
personal decision found only in the individual needs of the client.
Value is relative
Customers can not establish the value of an offering in isolation. They
always consider value relative to options. These options may not be other
products or systems, but other ways of accomplishing the same goals or doing
nothing at all.
The next time you are shopping and have more than two choices for the same
product, notice how you choose the one you are purchase. More often than
not, you are using a process of elimination when selecting the one that is
“best”. Some of our most important choices are made because we find
something wrong with the alternative.
Value is a mind-set
The value mind-set exists in both the client and the company. It is a
position that is staked out by tightly held perceptions. Wal-Mart, for
example, is well known for its low prices. But if you were to comparison
shop with other retail discount giants, there is very little difference when
you measure apples to apples price.
Through marketing and merchandising, and at great expense, Wal-Mart has
positioned itself as having the lowest prices in the industry. Is it true?
It doesn’t matter to their loyal customers because they believe and have
assigned value to Wal-Marts message of low prices. So if they need to
purchase bulk toilet paper, they will choose Wal-Mart because the client’s
mind-set is that they have the lowest prices.
Conclusion
How do you determine what value you bring to your clients? Ask them!
The best way to find out is to always communicate with them before and after
the sale. Conduct surveys and follow-up calls to find out what makes them
tick. Create different sales approaches that you can test and measure the
results systematically. Focus on different benefits in your marketing
offers until you have a clear understanding of what they want.
Fundamentally, it is really about establishing a relationship with your
clients and having the processes in place to further that relationship far
into the future.
