Adding value as a sales strategy doesn't rely, like discounting or price matching, on the consumer getting more for less. Instead, with value-added sales, the consumer gets more for the same price or even for an increased price. The key is to add value significant enough that customers feel the cost is well-worth the value received.
You can expand the value-added strategy and apply it to your entire business; by doing so, you're creating a business that systematically provides so much value to customers that they're happy to pay what you ask, and even feel privileged to do so.
The Three Questions to Help You Add Value
To add value to a product or service, ask these three questions:
1. What's the minimum acceptable offering for this item?
You want to establish a baseline of acceptability. Look at your competitors and see what they're offering. Are there gradients or levels? What's the industry standard? What will customers accept?
2. What's our acceptable level?
Are you currently offering this item at a level above or below the minimum? If below, you may be dipping into price matching as a sales strategy, which can be very dangerous. If you're already offering more than the minimum acceptable offer, how much more? Why? Is it sustainable? Do customers seem to notice or care about your 'extra'?
3. How can we dramatically increase the value our customers receive with this item?
This is the key question. You need to think about what customers will value and what you can afford to offer. Find out where those two requirements intersect, and use your options there to add value.
Now Do This for Your Entire Business
To move the value-added concept from a sales strategy to a business principle, take those three questions and ask them about each area of your business.
- What are the minimum acceptable operating standards for this area?
- What are our acceptable standards in this area?
- How can we dramatically increase the value our customers receive in this area?
Areas to consider include invoicing, customer service, shipping, warranties and returns, customer education, showroom and display.
To apply this concept to internal operations that don't directly touch customers, ask the questions this way:
- What's the minimum acceptable operating standard in this area?
- What's our acceptable operating standard in this area?
- How can we dramatically increase the value the business and our employees receive in this area?
There are two ways to add value to your business: increase output (productivity) or decrease cost (resources) required to do the task. There are also two ways to add value for your employees: increase the payment they receive (salary, benefits, perks, opportunities) and/or decrease the resources required from them (reduced hours, increased vacation, added flexibility).
In small business operations, it's common for habitual 'old' methods to be tweaked and used long after they cease to be the most effective way to accomplish a given
task. Updating the systems you use in your business operations can reduce the resources required to do the task and simultaneously increase the productive value. Pass that value on to your employees. Happy employees build healthy businesses.
Adding value for your customers keeps them satisfied while keeping you out of the low-price war. Applying the concept of added value to your entire business, including your employees, can help you to build a profitable, healthy business with an engaged team and a growing customer base.