When we think of value we often think of it in terms of money. Value is obtaining the best possible service/product for the least amount of money we can, right?
Wrong.
Real marketing means understanding what value truly means to a customer – and we do this by using the following equation:
Perceived Value > Perceived Cost
This is an equation that I love. It is simply saying that in the mind of your customer, the benefit they receive must outweigh the sacrifice they’ve had to make.
Clear as mud? Here’s a real example: the last time I visited my hairdresser I made a 35 mile round trip. The cut cost me £85 and took 1 ½ hours plus the 1-hour travelling time on top. An alternative was to go to the hairdresser in my village on foot, spend £35 and be in the chair for 1 ½ hours. So why didn’t I go to my village salon? It would have saved me huge amounts of time, effort and money.
In my mind, the value of my relationship with my hairdresser, who knows me (and my hair) far outweighed the time and monetary savings I could have made by visiting my local salon and having my hair cut by someone that I don’t know well.
So yes, I spent much more time, effort and money than was necessary, but due to the relationship benefits I believe that I gained much better value over all. And it’s what I believe that counts here.
When you think about delivering value to your clients – take the time to talk to them and find out where that value comes from. Our default position shouldn’t always be price because it’s rarely the default position of our clients when we’re brave enough to ask them.
If you’d like help understanding the value drivers for your customers, call Carmen Gray, Chartered Marketer on 07989 202009.
