Add value to raise your bottom line
June 23, 2008
SPEAKING OF SERVICE - by Jeff Kasper
You’ve certainly heard companies talk about this concept called, “added value.” So what does it mean? And, if the big companies are doing it, why can’t you?
Added value is what gives a company the right (decided on by the customer) to charge more for a product or service than what it costs them to buy or deliver it. The automobile industry is a classic example of adding value and charging you for it.
What is the functional value of an automobile? Transportation, right? So what is the added value? The added value is the body style, the color, the sound system, the sun roof, the interior comfort, and so on. Then, the industry recognized that people were also willing to pay for added safety with dual air bags, early warning signs, alarm systems, etc. These are the tangible things that add value.
There are also a host of non-tangibles (or perceived tangibles) items that people are willing to pay for such as a lifetime service guarantee, 24 hour road-side service, and many other things you can’t actually see. These are things that you may or may not end up using, but they sure add value to the vehicle, and many of us are willing to pay for them.
So ask yourself, and your staff, what is your business’ functional value, and what is your added value? What is it that gives you the right to charge what you charge? What does your competition offer? What do your customer’s find to be important? During the holidays, some grocery stores offer a 24 hour hotline on how to BBQ a turkey or other holiday recipes because that is important to their customers. What do you offer? What can you offer?
Jeff Kasper is the president & chief innovation officer of ServiceQuality.US, a customer loyalty, measurement, training and consulting firm, based in Concord, CA. Questions and comments can be sent to jk@servicequality.us or visit ©2008 Customer Loyalty Builders, Inc.
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