How to Deliver More Value to Your Customers

By Donald Cooper

Whatever you sell, your market is over-served and under-differentiated. There are too many other businesses selling the same products and most look alike, sound similar and charge about the same price.

Ultimately, customer ‘ownership’ and business profitability are about creating, delivering and communicating compelling value that grabs your target customers, clearly differentiates you from competitors, makes you ‘famous’ and grows your bottom line. Customers demand value and every business promises it, but there’s a huge lack of clarity about what ‘value’ really is. Let’s keep it simple. There are only three kinds of value: functional, emotional and financial.

Functional value refers to the usefulness and practical benefits that customers derive from a product or service. A business delivers functional value when it sells extraordinary products and services that actually work for their target customers; is open or available when needed; provides information, coaching and encouragement so customers can wisely choose and effectively use what is being sold; and creates policies, systems and processes that make it easy for customers to do business with them and that ensure efficiency and consistency.

Most businesses struggle with emotional value. It goes beyond the functional benefits and is the perceived worth that customers attach to a product or service based on the impression it has left on them. This type of value is delivered when customers feel better about themselves every time they do business with you and use what they’ve purchased. If not delivering this type of value, a business is not ‘connecting’ with customers on an emotional level, which is where most buying decisions are actually made or strongly influenced.

Many businesses emphasize functional value but financial value is most important. This is because it’s a product of the first two values; financial value is the amount a buyer would pay for a product or service based on its functional and emotional value. A business delivers financial value when its customers believe they paid a fair and competitive price for the functional and emotional value they got from the business. If you don’t deliver extraordinary functional and emotional value, no price, regardless of how low, will be good enough.

Donald Cooper has been both a world-class manufacturer and an award-winning retailer. Now a Toronto-based business speaker and coach, he helps business owners and managers rethink, refocus and re-energize their business to create compelling customer value, clarity of purpose and long-term profitability. Donald can be reached at [email protected].

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