Organizations should think strategically when creating value perceptions of their products or services. In fact, they should seek to establish a formal tiered system where possible. Strategic leaders have a long view on value creation.
Strategic thinking is defined as ‘the generation and application of business insights on a continual basis to achieve competitive advantage.’ In fact, strategic thinking focuses on value creation by enabling a provocative and creative dialogue among people who can affect a company’s direction.
Marketing expert Ken Favaro maintains that putting value creation first gives businesses two advantages over their competition in driving for profitable and sustainable growth: the first is capital and the second is talent. In fact, he argued that successful value creators never suffer from capital shortage.
Yet, this process shouldn’t be done in a vacuum. Customers and all members of the supply chain should provide input so that the expectations are clear. Businesses that pay more would get more benefits (i.e. certain perks, discounts, etc.). Therefore, the value proposition would be enhanced.
However, being strategically conscious about these business relationships isn’t simple. Value must be understood and sought out. Value is viewed as the perceived experience and worth gained from a product or service.
Organizations should make their product clear to customers; some businesses need to introduce a tiered system, based on value-added services. For example, if I want cheap fast food, I go to McDonalds.
Therefore, my expectations are lower than going to a five star restaurant. Customers are very understanding when the seller’s value proposition is clear.
Favaro further suggests that putting value creation consistently first requires leadership skills, discipline, and perseverance. He further challenged organizations to demand higher standards from managers who would jeopardize these business relationships.
Mark Johnston and Greg Marshall, authors of Relationship Selling, discuss that perceived value is in the eyes of the customer and varies. They further argued that customers expect and deserve consistency in the way an organization’s value-added message is put forth. Therefore, sales professionals’ biggest challenge is selling value.
Discuss the concept of custom value perception from your own professional experience.
© 2013 by Daryl D. Green