Category Archives for "Elements of Value"

Using Elements of Value

Over the last 30 weeks, I have posted about elements of value.  There are probably many more but the point is: what are the things your customers value?  Do you provide them?  Do you market them?  How can you use elements of value?

Can you break down the elements of value in your business for your customers?  Perhaps an overall benefit and several lesser benefits.  Here’s a brief recap.  You can find a full list of the 30 elements of value at the end of this post.

Functional Value

These are perhaps foundational values and for most offers, several apply.  One of these may be your overall benefit, if you offer something like accountancy or insurance.  However, look at the higher levels if you work in these industries, for example an accountant or insurance broker might reduce anxiety.  The work of an independent financial advisor might even be life changing!

For others, you sell something that maybe saves time and reduces risk.  Loads of things do this and so these are your lesser benefits.

In what sense are they foundational?  If your offer does not meet at least one and preferably several, then perhaps you don’t have a fully developed offer.

You may not have noticed some of these elements of value.  This is where this list of values comes into its own, it helps you name existing elements that add value to your offer.

Emotional Value

These elements address substantial needs in areas people are anxious about.  People worry about, eg health, attractiveness, community.

Some offers focus on these values and you may find your overall benefit belongs here.  A hairdresser for example might focus on attractiveness as their overall benefit.  You can of course offer several emotional values.

You may find many people cannot meet these values because they need to carry out life changes.  This implies you need to set your overall benefit at a higher level.  You should aim to set your overall benefit at the highest possible level.

Life Changing Value

These values make a substantial change to peoples’ lives.  The person seeking to become more attractive may need help with self-actualisation, for example.

At this level, choose one value as your overall benefit.  Your other benefits will be from emotional and functional value sets.

Social Impact Value

This value may be common but of course your offer should be very different from anyone else’s.  As we climb up the levels, the scope for variations in the detail of offers increases.  People seeking progress at this level will often need to build on values at the lower levels too.

Elements of Value Completed

The posts in this sequence can be accessed below:

How to Make an Offer that Informs Your Clients

Do you have a business that informs; provides reliable and trusted information?

What is It?

A business must provide reliable information.  If your information is wrong or deceives, you risk losing trust.  In these days of social media, you cannot guarantee an undamaged reputation.

Distinguish between information and opinion.  Context does not change information.  Advances in research occasionally supersede something we thought true.  We can cite sources so clients can check facts.

Opinions vary with context.  We may believe some group of people wrong, while others believe them.  You can never prove political beliefs, for example.

Value to the Customer

Information is valuable to customers in two ways : recreation and utility.

Sometimes a particular topic interests a client.  Even though they do not use the information for business purposes, they find it helps them grow as human beings.

Utility is where information has short or long-term business use.  It helps us advance in the business world and may be paid for by the customer or their employer.  There are three basic approaches:

How to Get There

What information does your customer need or want?  Too little information and the customer may feel short-changed.  It’s not only about operating instructions, you may find there is other information they appreciate, perhaps about other user’s experiences.  A blog may be a good way to explore other dimensions of the work.

Too much information and the customer may become bored or impatient.

Your Offer

Turn this element of value to your advantage by being clear about the information on offer and how to access it.  Offer guidelines so people can find the degree of information they seek.  Offer more information to those who express interest.

This is the thirty-first of 31 posts about elements of value.  Make sure you don’t miss any by signing up for the offer below.  The posts in this sequence can be accessed below:

How’s Your Sensory Appeal?

Sensory appeal is another functional element of value.  It applies to both products and services.

What is It?

Traditionally there are five senses, although there are occasional claims there are others.  Sensory appeal is using one or more of the senses to make the product or service more attractive.

We are talking about sensory appeal incidental to the product or service.  For example, good taste is integral to food.  We expect food to taste good, especially in a restaurant.  Certainly, a restaurant’s reputation for great tasting food helps but we arrive at any restaurant expecting the food to taste good.

Sensory appeal maybe a garnish that makes a dish visually attractive or the decor of the restaurant.  It is something that appeals to one or more senses, over and above the customer’s expectations.

Value to the Customer

This depends on the customer’s sensitivity and appreciation.  Some people don’t know what to expect and may not appreciate the deal is special.  Others may not be in the mood: those comfort eating following a relationship breakdown or a bereavement may be unmoved.  Others may be highly sensitive and appreciative through favourable circumstance.

Where service is personal, discerning the mood and desires of the customer is important.  Simply asking what they like may be all you need.

How to Get There

Review your offer.  It matters little whether you offer a product or service.  There is little scope with a boxed product that is shipped straight away.  It may be possible to slip a little extra in or if you sell from a shop, you can enhance the sales environment.

Where the customer consumes the product on the premises, there are more opportunities.  Coffee shops that sell food with a salad garnish are rare.  These days you’re lucky to get a napkin or a knife.   Some services are easier, massage or hairdressing includes opportunities for small extras such as refreshments or magazines.

What about coaching?  Consider the environment in which your coaching takes place.  You can choose a public place.  Is it quiet and pleasant, with good coffee?  Who pays?  Might an occasional change of venue help?  Maybe a walk in a park or countryside?

Another thing to consider is bonuses.  A small gift to say thank you to the customer may be appreciated.  Paying for coffee or meals is possible, especially for high-end offers.

Your Offer

If you have a sense of style, offer a service with a unifying sensual theme.  This could start with publicity materials, the story you tell and your approach to sales.

Continue in your working environment and in the bonuses you offer your clients.  These may be simple things like tea and biscuits.

Take care to manage expectations.  Don’t raise them and then disappoint.  Surprise bonuses mean you exceed expectations, without making promises you later find you cannot keep.

This is the thirtieth of 31 posts about elements of value.  Make sure you don’t miss any by signing up for the offer below.  The posts in this sequence can be accessed below:

• Social impact: Self-transcendence
• Life Changing: Provide Hope, Self-Actualisation, Motivation, Heirloom, Affiliation and Belonging
• Emotional: Reduces Anxiety, Rewards Me, Nostalgia, Design / Aesthetics, Badge Value, Wellness, Therapeutic Value, Fun / Entertainment, Attractiveness, Provides Access
• Functional: Saves Time, Simplifies, Makes Money, Reduces Risk, Organises, Integrates, Connects, Reduces Effort, Avoids Hassles, Reduced Costs, Quality, Variety, Sensory Appeal

Next: Informs

How Does Variety Sell?

Variety is a mixed blessing.  If you advertise a massive variety of products or services, is this attractive to more customers?

What is It?

Politicians go on about choice as if it is a good thing.  If I have an acute medical crisis, I am happy to allow my doctor make choices for me.  I trust my doctor.  I could choose between several hospitals but I’m going to ask which is the best one.

Variety works in two ways.  You cater for customers with many needs.  So, if you sell sports equipment, the beginner has different needs to the champion.  The experienced sportsperson knows exactly what they need and pays for it.  The beginner needs the basics and won’t spend a fortune in case they decide not to pursue the sport.

The other type of variety is a range of options with no particular reason a customer would choose one or another.  For example, ice cream flavours are a matter of personal preference.  They are similarly priced and the customer chooses their favourite or sometimes fancies something new.

Value to the Customer

It doesn’t follow the customer knows what they want.  Someone who needs coaching may have specific needs but does not always know enough to make their choice.  To offer a range of options may be counter-productive.

Alternatively, whilst a variety of ice cream flavours may attract the eye, how beneficial are they to the business?  Customers restrict their purchases to a small variety of flavours.  The business owner must consider the cost of producing so many flavours; wastage where some flavours are less popular.  Even queues that move slowly because customers take more time choosing.

How to Get There

For ice creams and similar products, there are diminishing returns to offering more options.  How much more inviting is “30 delicious flavours” to 15?  There are few advantages to offering in a supermarket more than 2 or 3 types of tinned tomatoes.

For the specialist, a lot depends on their customers’ awareness.  A knowledgeable customer wants to see everything on offer or specifies exactly what they seek.  For the less knowledgeable customer, exposure to all 15 options may be counter-productive.  Far better to find out what they need and offer a couple of options.

Offer two options because it gives the customer a choice and it is easier to opt for the cheapest than it is to say no outright.  If they are not happy with either, find out why and offer something more suitable.  With services, the issue may be one of trust.  The customer tries something low-priced before they opt for more expensive options.  They are unlikely to tell you this, so be ready with a low-priced option.  Once they become a customer, they are more likely to buy again.

The customer who says yes may be interested in an upsell.  Offer more until they say no, then seal the deal.

Your Offer

To what extent does variety increase the likelihood of people using your services?  To some degree variety is neutral, especially where customers want one specific thing.  They may come to you because they believe you have what they seek.  “We have what you seek” may be a better slogan than “View our extensive stock”.

They say variety is the spice of life but not all at once.

This is the twenty-ninth of 31 posts about elements of value.  Make sure you don’t miss any by signing up for the offer below.  The posts in this sequence can be accessed below:

Next: Sensory Appeal + 1 more

Delivering Quality to Your Customers

The problem with this functional element of value is credibility.  No business claims to deliver poor quality goods or services.  So how can you market quality credibly?

What is It?

You claim a quality service where you deliver a product or service to the highest possible standard.  Leaving aside the question of how you provide evidence, there is another factor to consider.

Quality is multi-factorial.  Your Crunchy Bites may be the crunchiest but that is no evidence of quality.  What do they taste like?  Nutritional value?  Environmental impact?  Are they fresh?  How do you treat your workers?  You can add many more.

They may be the crunchiest on the market but you cannot claim quality on one criterion alone.

Value to the Customer

Consider possible factors.  Not all customers care about all of these.  Some customers rate some factors as important.  Perhaps they all want a crunchy snack but after that vary about what is important.

If your packaging does not meet environmental standards some people, who would otherwise buy your snack, will not.  If your packaging meets minimal standards, your competitors may do better.

It is easy to see how you can get lost in a maze of regulations over a wide range of issues.

Maybe you can get by with customers who care only about crunch but that way you lose many potential customers.  What to do?

How to Get There

Customers expect minimum standards and maybe that is all you have capacity for.  Perhaps it is best not to broadcast quality as one of your elements of value.

Instead, use evidence you provide a good service.  Use things like awards, qualifications, endorsements and testimonials as evidence you provide a quality product or service.  If you provide a niche service or product, you may find you need go no further.

To go further, you need to build capacity.  I had experience of this during the 1990s, when we applied for funding for community enterprises.  Funding bodies insisted we met quality standards by providing evidence of compliance. This made us think deeply about what we were doing in all aspects of our work.  It was not easy but mostly improved performance.

The key to quality is accountability to an external authority.  This gets you beyond minimum legal requirements.  There is a point in the growth of your business, where quality becomes more important.  Addressing it too early absorbs a lot of time, with little financial benefit.

There are several quality standards available. Consultants can help you find the best for your business.  These include packages such as Investors in People or ISO standards.

Your Offer

Don’t misunderstand me.  A business that demonstrates it meets quality standards has an advantage in the marketplace.

However, you must juggle advantages with capacity.  In the early stages of business development, when you have not finally settled on your exact business, you develop new products and services and learn to market and sell them, quality may be premature.

Quality requires significant investment of time and finance.  Do it only once secure foundations are in place and you want to grow your business.

Some customers care about some aspects of quality.  Be ready for their questions but don’t worry too much about it.

This is the twenty-eighth of 31 posts about elements of value.  Make sure you don’t miss any by signing up for the offer below.  The posts in this sequence can be accessed below:

Next: Variety + 2 more

How to Offer Reduced Costs for Your Clients

This element of value offers reduced costs for clients.  Reduced costs may be incidental but can attract some clients.

What is It?

Reduced costs are significant but always lag behind making money.  The size of the business determines costs and overheads.  Income is not constrained in the same way.  It’s never easy but in principle you can increase income 10-fold or 100-fold or 1000-fold.  Even if you somehow abolish all costs, you limit savings to the original size of the costs.

What are costs?  They are often divided into costs and overheads.  Overheads are regular and paid whatever the turnover of the business, eg rent or utilities.  Costs increase as business increases, eg raw materials.

Value to the Customer

This is likely to appeal to a customer with a sizeable business and substantial turnover.  A coach working from home is likely to have low overheads.  Heat and light is unlikely to increase significantly, as they would still live there if not in business.  But remember (1) there may be tax advantages to the business and (2) reductions in domestic expenditure may cut drawings on the business.

Common overheads include fees, subscriptions and the like, eg your ISP, mobile phone, website host and subscriptions to online packages.  There may be substantial bills for training and coaching.  These increase as the business develops and the business owner can afford more expensive packages.

Costs increase as the business grows, eg raw materials or products the business uses.  Expenditure on utilities may increase as the business grows.

Finally, there is capital expenditure, occasional expenditure on equipment, eg computers and vehicles.  Buying outright reduces outgoings over time.  If your client flexes payments over months or years, they are likely to pay high interest rates on the loan.

How to Get There

There is a long list of possible costs.  Even reductions in domestic costs may be of value to smaller businesses.

You could offer to look at outgoings and suggest how to make savings.  This works well with packages that help make savings on domestic or business utilities.  Utility Warehouse is one example of this type of offer.

Another possibility, is to bundle together a range of services yourself.  A website designer might offer a package so the website owner does not need to make their own purchases.

And the obvious approach is to provide something cheaper.  Take care!  If you do this so that you receive the income you need for your business all well and good.   If you undercut your competitors you could trigger a race to the bottom, so you end up charging below the rate you need to survive.

Your Offer

Is this offer your main element of value, eg for a distributor for utility warehouse?  If so, be upfront about possible reduced costs.  You may have other lesser elements, eg Utility Warehouse issues one bill for several utilities, thus reducing bureaucracy, leading to a single monthly payment that assists with budgeting.

If reduction of costs is a beneficial side effect of your main offer, then add this element to your marketing lower down the page.  Focus on marketing your main offer and present savings as a benefit of that offer.

This is the twenty-seventh of 31 posts about elements of value.  Make sure you don’t miss any by signing up for the offer below.  The posts in this sequence can be accessed below:

Next: Quality + 3 more

How to Offer Something that Avoids Hassles

This element of value is elusive but important.  How do you offer something that avoids hassles?

What is It?

Hassles are integral to your product or service.  You offer something that combats hassles that originate elsewhere?  Fine but they most likely come under some other element of value.

Let’s say you offer a solution to a complex problem and so inevitably the solution is complex too.  Your customers may be concerned the solution will create more problems.  Your aim is to reassure them.

This is a hard value to sell.  The customer expects your shipping to be hassle-free.  They expect you to have a returns policy that works.  It is far easier to get a bad reputation in this area when you get it wrong.  When you get it right, you’re just doing what everyone expects you to do anyway.

Value to the Customer

You can do more where you have a complex offer and more can potentially go wrong.  Going wrong need not necessarily mean there’s something wrong with the offer.  Customers may have difficulty using it properly.

In these circumstances you need to offer support.

How to Get There

Here are a few possibilities to consider for complex offers.  You may need more than one of these.

Next: Reduced Costs + 4 more

How Does Your Offer Reduce Effort?

You save your customer’s time and energy, if your customer uses your offer to reduce effort. These can be redirected to more productive activities or work-life balance.

What is It?

Effort is productive.  To spend time and energy learning new skills is highly productive.  We learn how to do something new and gain insights into how it works.

However, doing something ourselves is not always productive.  Repeating the same activity over and again becomes tedious.  It ceases to be learning and becomes a chore.

Do-it-yourself hoovers up time we could use on more productive tasks and absorbs energy we need to do new things.  If it is something we are not particularly good at, it becomes more likely we make mistakes.

This is not about being lazy.  It is about the best use of time.  In other words, reduce effort in certain areas to increase business capacity.

Value to the Customer

Spending money to pay someone to do something that consumes time and energy builds capacity.

Consider the advantages.  You

How to Get There?

Consider where the customer needs help with a task.  Will they employ someone outright or buy a service?  How will they decide which tasks to outsource?

You need to educate your market about the advantages of reducing effort and how to find the help they seek.  What are the advantages of your way to reduce effort compared with your competitors?

Your Offer

Consider the range of activities that reduce effort for your customers.  All aspects of administration or accountancy, plus research can be productive. Research is a skill that takes time to learn properly.  Engaging a researcher may be real value for money if they do a thorough job.

Similarly online activities reduce effort.  For some businesses, help with SEO or social media saves time and energy and generates more results.

However, the more vital the work to the success of the business, the more vital a good working relationship.  There is always employing someone to do the work or training a member of staff.

Like most functional elements, your offer may already reduce effort for your customers.  If so, spell out exactly how your offer reduces effort.

Be clear about your expertise or qualifications.  The customer needs to know they can rely on you and you are insured where that is appropriate.

This is the twenty-fifth of 31 posts about elements of value.  Make sure you don’t miss any by signing up for the offer below.  The posts in this sequence can be accessed below:

Next: Avoids Hassles + 5 more

How to Market Connection

This element of value brings people together by making a connection.

What is It?

Bringing people together extends social networks and causes change through shared activity.

Sponsorship sometimes achieves this aim.   Some companies sponsor sporting events, for example.  They might equally sponsor arts or hobbies.

Whilst it undoubtedly has value and is a welcome contribution to culture, this feels slightly odd because the thing sponsored need have no connection with the business.

Furthermore, where sponsorship includes advertising the sponsor on sportswear or similar, the whole event sometimes feels tarnished.  For example, some years ago tobacco firms frequently sponsored sports events.

In any event, sponsorship is something for larger more established businesses.  How can connection help smaller businesses?

Value to the Customer

Offering activities where people meet, share an interest and learn from each other may be an advantage.

Business network events are one example.  Whilst some networks are businesses in their own right, they offer opportunities for smaller businesses to enhance their reputation locally.

Alternatively, you can organise events to bring people with shared interests together.  Workshops are popular and well-promoted can be a good showcase for your business.

Similarly courses and webinars are opportunities to bring people together.

How to Get There

Mostly, sponsorship or otherwise, this is brand marketing.  You can sink a lot of money into activities, with no sense of how valuable they are to your business.

Workshops work as direct marketing if you find customers through the workshop.  They may use your services if the workshop builds their trust in you.

If you deliver workshops, review your marketing to check you highlight how your offers increase connection.

Your Offer

This is another functional element of value that rarely stands alone.  Your market by definition shares common interests.  Is it possible to bring them together?

Possibly not if your business is something people are not prepared to share.  If you coach people who suffer from stress, they may not wish to share that interest!

Even if they are prepared to attend workshops, do they really attend to meet other stressed people?  There may be ways you can show them value in such encounters but this requires careful planning.

This is the twenty-fourth of 31 posts about elements of value.  Make sure you don’t miss any by signing up for the offer below.  The posts in this sequence can be accessed below:

• Social impact: Self-transcendence
• Life Changing: Provide Hope, Self-Actualisation, Motivation, Heirloom, Affiliation and Belonging
• Emotional: Reduces Anxiety, Rewards Me, Nostalgia, Design / Aesthetics, Badge Value, Wellness, Therapeutic Value, Fun / Entertainment, Attractiveness, Provides Access
• Functional: Saves Time, Simplifies, Makes Money, Reduces Risk, Organises, Integrates, Connects

Next: Reduces Effort + 6 more

How Your Offer Integrates Products and Services

This survey of functional elements of value, considers practical aspects of products or services.  One challenge is to show what integrates products and services in your higher level offers.

What is It?

If you sell a service, is there anything you can automate at the same time?  The aim is convenience.  For one set of inputs, the customer receives a range of outputs.

Let’s say you market a system for recording accounts.  Your customer’s primary concern is end of year accounts for tax purposes.  Each month, you enter their income and expenditure item by item.  At the end of the year, the system produces annual accounts for tax returns.

This same information generates monthly management accounts with projections.  This may be of more value to the customer than the annual accounts.

If you are a life coach, offer other services as bonuses to your main offer.  As you get to know your client, if they want those services, offer them at no extra charge.

Value to the Customer

You may find secondary items integrated into your offer are more popular than the main offer.  Most accountants integrate annual accounts and management accounts.  Customers approach the accountant because they need help with annual accountants, which they must complete.  They find management accounts more useful, even though they did not expect them when they first approached the accountant.

However, be aware piling on more bells and whistles is not always positive.  We all use software that does far more than what we use it for.  It is possible we would use more if we knew how to use it but a lot of these add-ons are clutter.  They take up disk space and confuse an otherwise user-friendly interface.

How to Get There

If you create bricolage, one thing piled on top of another, it is not integration.  You are likely to produce a confusing mess.

A well-integrated package brings together several services customers want and delivers them with least possible inputs.

How do you work this out?  It depends on knowing your customers and what they need and want.  How do they go about their work?  How can you develop something they find easy to operate that delivers what they need with least effort?

Your Offer

Think about your customers, the way they work and what they need to complete their work.

Offer integrated products and services that exceed their expectations.  Aim for simplicity combined with high-powered utility.

This is the twenty-third of 31 posts about elements of value.  Make sure you don’t miss any by signing up for the offer below.  The posts in this sequence can be accessed below:

Next: Connects + 7 more