Weekly Business Idea

June 23, 2017 – What is Valuable to My Customers?

Posted on | June 23, 2017 | No Comments

Main Idea:

Do your customers love dealing with you?  Do you get a lot of griping about the cost of your product or service?  Do your customers refer other friends to your business?  Do you know why they buy from you versus your competitor down the street?  If you purchased an item that originally lists for $150 and you are able to purchase it for $75, are you buying a $150 item or a $75 item?

Expansion of the Idea:

I just finished reading a business analysis of Ford’s disastrous launch of the Edsel.  Based on the article’s analysis, I think Ford did a tremendous job of marketing the car.  They spent a large amount of money doing some very creative marketing.  The problem was that between when they originally designed the car and when it went to market, people’s taste changed and Ford didn’t know what was valuable to its potential customers.  They could not add any value because there was no way to change the fundamental offering.

Our customer’s perception of value is a critical item to understand.  Our products and services are worth different things to different people.  If you doubt this, think about a $100 bill.  What would you have done when you were a teenager to earn $100?  What would you do now?  Is there a big difference in the number of hours you would work to earn $100?  Compare your answer to what someone like Warren Buffett might do to earn that same amount of money.  Who would work harder to earn that money?  There is a big difference in hours worked for something that is objectively worth the same amount.

The only way to begin to understand what your product or service is worth to your customers is to start thinking like them.  Maybe you can go to their offices or where they spend a lot of time.  You can ask them questions and try to get inside their heads.  Below are some questions that might help if you think about them from the customers point of view:

  • Why are they buying my product?
  • What are they trying to solve?
  • What are their frustrations?
  • What are their desires?
  • How does your product enhance their life?
  • What is important to your customers?
  • How is your customer going to use your product?
  • What is driving their decisions?
  • Are they in a short-term mode of thinking or long-term mode?
  • Who is making the decision or is it a group?
  • Why do customers buy from your competitor?
  • Put another way, why aren’t customers buying from you?

By systematically doing this, you start to build a framework of what is valuable to your customers.  Of course, each customer is different but there are some similarities.  Ideally you sell to one main type of individual or business and it would be easy to go through these questions with that A client in mind.  However, if you have two or three different types of clients, then you need to go through these questions separately for each of your main types of clients.

Only by identifying what is valuable can you then identify ways to increase or market that value.  When you increase what is valuable to your customers, you increase your loyalty from those customers.  And that translates to improved profitability.

Places to Start:

  1. Make a list of 10 things that are valuable to your customers.
  2. Have your team do the same.
  3. Ask your customers what is valuable to them.
  4. Compare the answers.
  5. Put together a composite of what is valuable to your customers.

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  • About

    These weekly ideas are brought to you by FitzGerald & FitzGerald P.C. For more information about how to use these ideas with your small business contact Tim FitzGerald at trfitz@fitz-net.com.