In a world where some are talking about the “New Normal” for our economic landscape, defining value may be more important than ever. But of all the terms used in business, value is probably one of the most overused. We are bombarded with “value proposition”, “added value”, “and more value”, even “hidden value”. So are these just marketing twists to get your attention, or the real root of business?
When defining your business and determining the reason that it exists, there is nothing more compelling than looking for value. We use terms like what are they prepared to pay? Let’s not leave any money on the table, and margins are crucial, but at the bottom of all these is the need to understand the value. If you buy something for $50 and sell it for $80, you need to understand the value of the $30. It may come in a variety of forms, for example:
- Part of the cost of holding stock
- Having service available when someone calls
- Providing experience and expertise
- Knowing where to source something
- Overhead required to supply business
- Being clever!
The list goes on, and some value is harder to define. However in most cases it is generally there. Businesses need to constantly review that value, ensuring value still remains, and see whether competitors are delivering more for less. We all need to make a sustainable profit, margin on cost to stay in business, so the trick is to know where the value is, measure it and continue to deliver it.
It’s the simple things that sometimes get overlooked. When we say value, let’s make sure we know what that means for us, and then we can not only add to that value, but relax in the knowledge that we know where the value is for our customers.