Introduction to Value (value delivered, value perceived, and the real value)!
The client expectation (i.e. perceived value or standard baseline or benchmark expectation) is like an inflation that will always increase year on year. And, it is important to meet these accelerating expectations to keep clients satisfied. However, it may reach a stage when the value delivered may fall short of client expectations (i.e. value perceived), and may result in client dissatisfaction. The proactive approach to this situation is to consistently improvise delivered value through value-addition a.k.a. Value-add (can be defined as unexpected additional benefits delivered) to clients, to create ‘positive real value’ (equals to value delivered less value perceived). Confused? No worries, understanding this concept is not a challenge, however consistently delivering it, certainly is! One may have custom forms of value-adds based on markets, industry, business model, product, service, and clients, however the basic tenets of value and value-adds would remain same. If this concept is religiously practiced, then one can earn delighted & loyal clients for lifetime.
What is the need for providing Value-add?
Over-delivery to your clients will always keep your clients happy. Any mismatch between the delivered value and the increasing client expectations may lead to client dissatisfaction. In addition, the following market-forces may push you to provide more value-adds:
Severe competition amidst economic slowdown
There is a stiff competition in most of markets (developed/emerging/frontier) and sectors; and the players are desperate to win business. The new startups are focused on launching more and more disruptive ideas in the market, and eating into the market share of established companies. Even to sustain this competition, one is forced to protect its valued clientele first, by offering “more” (read Value-adds!).
Standardization or ‘productization’
Today not only the products but also the services are standardized. For instance, the suite of products and services offered by banks & financial institutions have uniform features when compared side-by-side. The products sold & services offered through e-retailers like Amazon and Alibaba are almost comparable. The cost-effective clones of Apple iPhone and Samsung phones posing major threats to these giants. In such situation, it is crucial to emphasize on Value and provide consistent value-adds to justify products/services and the price!
Strong need for differentiation
Due to severe competition and standardization of products/services, it is paramount for companies to bring differentiation in services/products to ensure relative superior value-addition experience for its customers.
Some basic yet important tenets of Value-adds
Offer the unexpected
Offering something which is expected or already offered in the market is certainly not a value-add…so do the homework very well. Needless to say, clients like positive surprises!
Relevant and impactful ideas
The value-add should be relevant. Any random freebee may not be perceived as a value-add by client. Also, ensure that it has a potential positive impact on the customers’ business/function. To make it impactful, address the needs that matters most to your clients. Please note, offering something with no/less relevance or no/less impact to clients’ requirements is risky and may backfire. Instead you would rather not offer any such value-add!
Cultivate a ‘Value-add’ culture in your team
One of my clients had said, ‘Girish, yesterday’s innovation is today’s expectation’ – how true! The sustainable positive results can be visible only through consistency. Hence, you need a highly motivated team with zeal to provide unswerving value-adds to customers. Some companies even go the extent of adding ‘Value-add’ to employees’ KRAs. The objective is to accentuate the need for constant delivery of value-adds, as it’s never a one-time affair.
And, if you do everything right, I would be surprised if you won’t enjoy the following key business benefits:
- Delighted and loyal customers
- High probability of repeat business
- Improved brand value/image
- Increased market share
- A highly motivated team
This article is authored by Girish Bhise (Founder & CEO of ValueAdd)
About The Author:
Girish has over 15 years of research experience across investment banking, equity research, fixed income and credit research, and business strategy research for large global clients including asset management firms, investment banks, brokerage firms, corporations, private equity & venture capital firms. Has extensive experience in successfully managing large-scale research right-shoring transitions across multiple regions. Is a thought-leader in the global research & technology industry. He is an MBA with specialization in Finance from the University of Pune, and Bachelor in Commerce from the University of Mumbai.
Please share your feedback/comments/thoughts on firstname.lastname@example.org. Thank you for time.