Understand what customers appreciate
Worth is the name of the game in every market, but how do you define it? You could say: "It's easy! A customer who appreciates a good-smelling home places value on a candle." That is true, but it is only a small fraction of the equation.
Put yourself in the position of this customer for a moment. When 20 companies try to sell you candles, what makes one more valuable than the other? This concept confuses even the best companies and marketers. In this way you can better understand customer benefits and increase success in your market.
In the business world, value is value. Back to the candle example: How much value does a potential buyer put in a particular candle? Regardless of which product or service you sell, you have to decide why a purchase is worthwhile for the consumer.
While a candle will surely improve the buyer's home smell, other values play a role that can add value. Each of these values is what the customer receives in return for the price paid. In this example, these would be:
- How long does the candle burn?
- Which fragrances are available?
- Chemical-free / organic ingredients
- The size or shape of the candle
- Color and the decorative nature of the container
All of this increases the value of the product and this value does not change for the consumer. What changes is the price. An increase or decrease in costs only changes the buyer's incentive to draw your attention to your market offer. So the challenge is to make sure that the cost to the consumer doesn't exceed the value of the product.
Customer value models
Because every potential customer places a particular value on a particular item, including candles, it can be difficult to tell where that value is. The best approach is field value assessment, but this is rarely possible. Fortunately, there are many other tools available to you.
You can use direct and indirect survey questions to gain valuable insight into where customers value. There are also common analysis and focus groups to better understand the perception of the functionality and performance of your product.
All of this can help you determine the value and adjust the price accordingly, but you also live in the modern age. The internet is full of customer value management tools that help you better use your surveys and ratings and organize the information you need more easily.
These tools also provide better insight and enable you to leverage this information across your organization while empowering everyone from product managers to your sales teams and value engineers. Some also offer case study manufacturers, which are a great way to add value and increase shelf price.
The bottom line
The value is relative, but it exists in the minds of every consumer in your market. By understanding your product and increasing its value and creating customer value models, you can determine the best value for money. Even though it is a complex science, there are tools that can help you clear the way to victory.