ADDING MORE VALUE TO CUSTOMERS

ADDING MORE VALUE TO CUSTOMERS

Why do people buy a product or service? Or, for that matter, why do people do all the things they do? There is a very critical and one answer and that is people buy a product or service to get better value for their money. People also do all the other things they do because they value the things they do or expect to get a value for the things they do. Value thus is a forceful motivator for customers to do business with companies offering goods and services.
Companies, which in the eyes of customers offer more value, will attract more customers and leave behind their competitors. Accordingly, every business, in order to succeed and move ahead of its competitors, must add more value to its product and services so that more people will buy from it.

CUSTOMERS COST:
Customer in addition to money also pays other emotional and intangible costs when they buy a product or service from a company.

What is cost?

Cost stands for the monetary and psychic expenses one incurs in exchange for the value of a product or service. The following are some of the costs incurred by customers when they buy a product or service from a business.

• Money

Money is a commodity that customers feel hard to part with. People do expect better returns for this major cost incurred.

• Time

Time is a very precious thing for everyone. For some, the cost of time is considered to be higher than that of money, and these customers dislike having their time wasted.

• Energy

The effort made to acquire a product or service and the physical and mental effort is also a cost paid by buyers.

• Psychic

Psychic costs include dealing with new people, waiting, filling up forms, the need to understand new procedures and the effort to adjust oneself to new things and situations.
There are many ways of doing that, but first we will define what value is.

CUSTOMER’S VALUE:

What is value?

Value for customers is the material and psychological return they get from a business in return from the money and psychological costs they pay for it.

There are various types of values:

• Product

The tangible and material goods received from a business transaction are called a product. Depending on the nature of the product and the needs of a customer, a product’s value can mean many things. Durability, reliability, quantity, quality, freshness and taste are some of the qualities, which can make a product more valuable to a customer.

• Service

Service is the manner through which the product is delivered. Courtesy, speed and correct information are some of the service factors, which add value to the product delivered to the customer. The better a business provides services along with the delivery of products, the more people will get attracted to it.

• Respect

One of the basic needs of human is the need to be respected. Respect is the dignified treatment people receive from business in term of trust, courtesy, recognition and care. This is also related to the service given by companies to its buyers.

• Convenience

Convenience is the ease with which one receives the product or service. Abundant availability, home delivery, proximity are some of the elements which can add on the convenience of customers.

• Image

Image is the psychological boost to one’s self image through the possession of a product or the receipt of a service. Use and consumption by famous personalities, luxury, unique features, scarce supply, expensive material, professional people who deliver the service, status, are some of the image-adding factors for a product or service.

VALUE-ADDED STRATEGIES:

Creating more value for customers and minimizing the different costs they pay can give a competitive edge to a business. In essence, the “Minimax” approach of minimizing costs and maximizing returns for the customers is required to attract , satisfy and retain customers.

The following, are some of the value-added strategies which can be adopted by businesses.

• SUPERIOR QUALITY

Quality means different things to different businesses and different customers. Products and services which meet the needs of customers in terms of durability, reliability, features, fitness for use, etc, re good quality products. Businesses today must provide excellent quality because the customers demand it and those who fail to do so fail to have the support of customers.

• EXCELLENT SERVICE:

I am a regular guest of one hotel which is located at scenic location and possesses excellent facilities. I have noticed that bell boy who carries my luggage never greets me, tries to avoid discussions and shows a very neutral and cold attitude. Recently, I happened to stay in another hotel. The bell boy greeted me very warmly, asked me how long I was going to stay there and explained to me how to operate the room facilities. As he was leaving, he wished me a good stay and said, “Sir, if you need anything please call me or our reception”. I really felt very happy. This experience made me realize what was missing in the first hotel and what excellent service can mean for customer. Excellent service is an excellent strategy to add more value for one’s customers.

• SPEED:

Time is a precious commodity and people hate to waste it. Businesses which waste their customers time can easily earn their hatred and withdrawal. As such businesses must strive to accelerate their processes and provide speedy service to their clients.

Customers are the most important people for any business and the most important and critical factor for any customer to buy a product or service from an organisation is their perception how much value they get for their money and other costs. Each customer calculates in his or her mind the cost paid and benefits received. Money, time, and the psychological in-conveniences are some of the prices a customer pay. An organization must therefore strive to find out what customers value, remove un-necessary costs paid by the customers and provide more value to its customers.