The importance of understanding customer value

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Xeinadin Group

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If you take the time to learn what your customers value and what they are prepared to pay for, you’ll be able to market your business more effectively and win new customers.

This is the definition of customer value and it’s important to keep it in mind. The same goes for the following: customers don’t buy features – they buy benefits, goals and results. Most businesses make the mistake of thinking about value purely in terms of money. They create special offers to promote their products and services, but all they are doing is cutting their profit margin in a race to the bottom.

Adding customer value

As said, value is about more than just money. Your customers are seeking an outcome and this is what drives their buying decision. For example, an accountant might save a client £6,000 on their tax bill and charges £2,000 for doing the tax work. The monetary value to the client is, therefore, £4,000. But what if this is only the beginning? What if the client wants to grow their business over the next three years? As an accountant, you could add value by providing advisory services to the client to help them to achieve that goal. The client would be willing to pay for that additional service because it helps them to reach their objective.

“The client may value the convenience and efficient service to the degree that they may even be willing to spend more for that service.”

The experience counts

What also influences a customer’s perspective of value, is the experience. If an accountant is hard to deal with and difficult to reach, a client will not think that the service is great and may question whether it is worth the money. On the other hand, if the accountant offers meetings over Skype, at a time convenient for the client and provides documents by email with e-signature capability, the client may value the convenience and efficient service to the degree that they may even be willing to spend more for that service.

An excellent example

Therefore, understanding customer value is essential for marketing your products and services more effectively.