I always tell my teammates: you must create and deliver values to the customers
They all agree, always! That’s so obvious.
But I’m always frustrated with the results.
Obviously, I must explain better about the values. The customer’s values.
How to create value for your targeted customer’s segments?
Your values? Their values?
Stay cautious when you hear somebody speaking about his company core values as an object to promote and sell to the customer. Commitment, efficiency, ethic, and others can be your company core values. They demonstrate how your company behaves …. but this is not what we speak about.
We speak about the values that generate money. We speak about the values your customers are buying.
So, don’t mix up your core values with the values your customers are buying.
Your targeted customers listen about real values for them. In other words, their perceived values.
I’ll try in this post, to reveal these values, the values for your targeted customer’s segments.
How to define those values?
How to create value for your targeted customer’s segments?
The first and simplest way is to remember why you have created an outstanding offer. In other words, what are you delivering to your customers
Just as a reminder, an offer in marketing can be :
- a tangible product(s) or virtual as a software,
- a service or set of services,
- solutions combining physical products, virtual products, software, and services.
So, you have created an outstanding offer.
Outstanding because it answers to the needs and pains of your targeted customers, in a better way than your competitors!
This sentence alone contains all the meaning of what you intend to deliver to your customers.
Keep it your mind, this is a driver of Business to Business marketing when creating a new offer.
Your offer is answering to the needs and pains of your targeted customers, in a better way than your competitors !
- Firstly, it is for your target!
- Secondly, it is solving needs and pains. It’s useful!
- Last it’s having a competitive edge!
That’s simply the way to create values
Your offer can be described with a list of features.
What are the features?
Those are the attributes of your offer and the values of those attributes.
As an example of attributes and their values, let’s have a quick look at your smart-phone (which can be described with thousands of features) and name 3 of its attributes with their values.
Let’s say the size of the screen, the battery capacity, and the memory size.
For those 3 attributes, the values are given in inches, A.h and multiple of bytes respectively. Depending on the brand and on the model, those 3 attributes are going to be delivered with different values.
As example :
“Memory size of 64 GB” is a feature, or characteristic. It’s made of one attribute: Memory size, and a value: 64 GB.
My car is red! That’s one of my car’s feature, color being the attribute and red being its value.
These simple examples illustrate attributes and their values. Easy to understand?
The features of your offers are physical and measurable.
Of course, they are answering your target’s needs and pains.
High performances are not always values.
Take time to make a descriptive analysis of a product. List the features, all the features.
There are features that each and every competitor on the market is delivering and that every customer needs (I will have to write a post about what is a customer need).
Those features are compulsory. Moreover, that’s usually the features that describe the operations or functions achieved by your product.
Note that these features, not all but most of them, are not differentiating your offers from the competition. But you must provide them because your lowest target is to be at least at the same level as your competitors.
You have heard, or will hear, about “me-too” products. A very negative way to describe your product as being just the same as your competitor, just a poor copy.
You do not create value for your targeted customer’s segments by delivering me-too products.
So, to do better, why not use the values of your offer’s attributes as performances index?
Everybody will agree that the better is the value of an attribute, the higher is the performance.
Your car’s speed limit as an example. A maximum speed of 200 km/h is better than a maximum speed of 160 km/h?
It’s your car, for your daily commute to work, on speed-controlled road and highway … higher performance is therefore useless.
The better is the value of an attribute, the higher is the performance: Right and wrong!
A high performance that is useless or meaningless for a customer is just a waste of time and money.
There’s no reason to make products with higher performances than your competitor if it does not create real customer’s benefits, the benefits that your customer will buy.
It’s more efficient to make products that have differentiating advantages.
Do not create high performances ! Create the right performances
More features is not a value
The features, with their performance levels, must be perceived as a real value for your targeted customer. Therefore, you’d better know who are your customer ! (read about the segment in this post )
The right features :
– are compulsory for your offer to deliver its operation ( functionally, safely, easily, …)
– deliver performances level that matches your customer needs (life time, speed, environment, certifications, weight, ….).
Just sticking to these two assessments to create your product, gives you the feeling that your final product will be the same poor copy as your competitors. As a result, you are trying to add more and more features.
There are features that some of your competitors are delivering, but the customers do not really need them.
Those can be options sometimes or performances exceeding the usefulness. Those are almost useless features. Why do they exist?
Because there are still people who believe and promote that the more is the better. Or sometimes, because they can do it.
Hey! You are in business! You must optimize your selling price and minimize your cost!
Over performances, extra features and options are just losses if your customers are not paying for them. In other words, more features are not perceived values if the customers are not paying for it.
So be very cautious and strong about customer’s needs and values. Spending more in time, in design or in resources is a risk to your business if you can not sell those extra-features.
The right performance level is a value.
You may have already products with over-performances.
Then, when you maintain or re-design these products you must challenge the reasons-to-be of those over-performances.
The good reason “we always did like this” is a bad reason.
One day you will discover a competitor eating your market shares with much lower selling price than you.
All your expert will discuss and spend energy in reverse engineering to tell you that it’s not possible. Or they will show you that it’s lower price because the performances are lower so the quality is not so good!
I heard this so many times, and I want to kill this wrong belief: quality is not equal to higher performances. Quality is to provide the promises the first time and each time, and always in due time.
Coming back to this story of the lower selling price, the truth is elsewhere: you may face a smarter competitor that is delivering the just enough level of performance for its just defined price level.
Do not wait to discover this fact on your battlefield!
Anticipate to be the winner: know your customer’s real needs, understand his real perceived values … and deliver the right performances at the right selling price.
As an example, when your customer understanding and knowledge is demonstrating that the need for your product’s lifetime is 200 000 cycles, what the hell is the reason to spend money in creating a product that can last 1 million cycles?
There are tons of because :
your competitor does it? That’s the habit to do like this? The technology allows you to do it?
Do you have so much cash that you must spend it?
Wake up my friend.
When your customer knowledge is right, deliver the right performance at the right price is to deliver real value. While improving your own profit because you did not over-spend to create more than the real need.
The gold mine: the competitive edge.
How can you create value for your targeted customer’s segments?
There are features that none of your competitors delivers but can provide amazing answers to customer’s needs an pains. Those are your differentiation.
What can make your offer better than your competitor?
Your understanding of Who is doing what, how, when and why. The gold mine of is your ability to really discover these famous W’s.
Some may say that I’m wrong and the competitive edge is coming from new technology and innovations.
That’s not exactly like this.
New technology for the purpose of the technology itself has no value in B2B.
What is innovation in B2B while creating customer value?
It is: understanding the customer’s needs and pains and use existing or new technologies to create customer value. In other words, to answer needs and pains into an easier and more valuable manner.
When your targeted customers understanding is close to 100%, you have this unique ability to create a competitive edge.
Therefore, your offer will have features that nobody else can provide, and that are outstanding manners to solve customer needs and pains.
You know, when you hear “that’s so obvious, why nobody did it before? ” … here you are!
Features, Advantages , Benefits … Values ?
Is there an easy way to convert your offer’s features into values for your targeted customer?
No there isn’t any easy way. You must learn and practice every day to understand and challenge your knowledge of customer’s needs and pains. This happens when you interact with people at your customer’s. Nowhere else.
To simplify your life, I’d like to recall a training I had in the ’90s (oh yes, time is flying):
Features are the observable and measurable attributes of any product or service. Features describe your product.
Advantages are the way the features create benefits for your targeted customer. Advantages tell what your product is doing.
Benefits are personal gains your customers get from your products. Benefits are the reasons why your customers need your product.
Going through these 3 chained definitions can help you to name the values of your offers.
Look like easier to do, but it does not replace your customer experience.
People and Values.
I’d like you to take some steps back. A little bit away from your offers, from your product.
Then you see that there’s several human being, directly and indirectly taking advantages from the values of your products.
That’s important because your offer must also deliver values as personal gains, some benefits. What are they?
You will discover them along with my different posts, let me list the more important :
– Money-saving, your offer helps your customer to decrease his direct and indirect costs.
– Time-saving, your offer helps your customer to be more reactive and more efficient.
– Quality, your offer helps your customer to increase the quality of his own deliverable.
– Knowledge, your offer brings your customer a new valuable knowledge ( a knowledge he can turn into money)
– personal branding ( more and more important into our digital world) , your offer makes your customer recognized by his peers for his wise choices and decisions
I encourage you to create and maintain your list of customer’s values in a few categories, an easy way to use :
The personal gains – addressing human-beings and sometimes selfish concerns
The competitive edge – the gold mine that you, marketers as treasure hunters, are digging every day when listening and observing your customers as persona.
The features – offer’s attributes with their right level of values, challenging the over performances.
The value you give to something is the combination of the features, plus the competitive edge, plus your personal gains. That’s exactly the same for your customers.
In other words, this is what your customer gets when he will buy your offer.
How can you create value for your targeted customer’s segments?
Finally, what is the perceived value?
It is the ratio between what you get and what you paid.
In a mathematical way to write it, the perceived value is equal to the sum of everything you can get from an offer, divided by the price you have to pay to get this offer to be yours.
Value = What you get / Price you paid
This is a wonderful ratio because it is simple and obvious. Easy to remember!
This is the value that is perceived by your targeted customer.
Mathematically, this wonderful ratio demonstrates that the highest is the perceived values, the highest can be the selling price. As well as it shows that your price must be low if your offer doesn’t deliver enough.
What you should keep in mind: Delivering the right perceived value is generating more sustainable and higher revenues and profits.
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