Understanding your customer value proposition

What makes you good at what you do? What you think may differ from your customers’ perception…

In this Article:

The best way to improve your bottom line is to improve your (perceived) value

By understanding what your customers value you can increase loyalty

Within reason, price shouldn’t be a dealbreaker

In simple terms, a value exchange is where someone is paying for your services and you are providing those services to them. Deal done? Not quite.

Almost everyone likes a bargain. But this rarely comes down to the price we pay. Most people don’t opt for the cheapest deal in town, instead what they want — what they really really want — is value for money.

With so much choice at our fingertips, the days of blind customer loyalty are behind us, and tradies need to look at the value they offer to keep clients coming back, and recommending your business to others. Oh, and good value means you can charge more than your competitors for the same basic services. Here’s how.

Understand the customer value you offer

A true two-way exchange of value is where both parties benefit. Let’s call it the sweet spot, where the customer truly understands the value your business delivers, and your business receives a fair price for services and gets talked up around town. So, it’s important to understand what it is that your customers appreciate, so you can leverage it to tip some value your way.

“If the only difference between you and your competition is a logo at the top of your quote, of course your prospects are going to go with the cheapest option,” says Bayley Peachey, Business Coach and Partner at Trade Business Accountants in Brisbane.

“Think about what makes you special. Are you the superhero of security systems, the Gandalf of green energy or the Jedi Master of home automation? Show them why they should choose you over the other guys.”

Once you’ve nailed this, you’re all set to…

Make ’em an offer they can’t refuse

Price is what you pay, value is what you get. If the key is to get people to believe what they’re getting (value) is worth more than what they’re giving in exchange for it (price), you might think the simplest thing to do is lower the price.

“There’s absolutely nothing wrong with being the ‘cheap guys’, if you want to be busy and broke,” says Bayley. “But if you want to build a successful business and charge more for your services, then you need to differentiate yourself from the rest of the pack and provide greater value — NOT reduce your price.”

The goal of a good offer is to get more people to say yes at a higher price by increasing your value-to-price discrepancy. Of course, there’s no point in doing this if people don’t know about it, so…

Update your marketing and sales comms

You might think everyone offers pretty much the same things in general electrics, but the customer doesn’t know that.

“Don’t make the assumption that clients know everything about your business or what you do or how it works,” says Bayley.

“Communicate everything. Even if every electrician does what you’re saying, if you’re the one who has articulated it in your marketing material, your perceived value is automatically higher. Update your marketing and sales material to reflect a premium brand with a premium offer.”

If a customer believes your service is worth more, the decision to hire you will be easier. Which will allow you to increase your prices. Although things can still go wrong if you don’t…

Deliver on your customer value promise

Keeping promises to customers underpins everything a business does and is at the core of great customer service. Do you call people back when you say you’re going to? Do you honour appointments, and are you on time? Do you start projects on the day you say you will? Do you take the time to listen and understand a situation? Do you keep clients informed? Customer Value

Customers understand there may be unforeseen problems and are more likely to be forgiving of this if they know a business has tried its best and will go the extra mile to make amends. Value comes from keeping promises – the ones in black and white and those that are simply implied.

“Perceived value is how you lock in a client you’ve never worked with before; actual value is how you keep them,” says Bayley. “And actual value is the only ethical mechanism to give yourself greater pricing flexibility.

“Building a better business, becoming more profitable and dominating your local area all start by simply honouring the commitments you make to your customers – and by delivering an experience that matches your price.”

Remember — you are in control of all the things you can control. And as for the things you can’t…

Understanding your customer value proposition: Play to your God-given strengths

There are some things you can’t change but are still essential to the perceived value of the work you do. Are you a local, family-owned business? Say so! In these days of increased centralisation, people are looking to support local businesses and keep their money in their hometown. Years of business heritage, history and reputation are key marketing tools there for the using.

“Your background and your story are unique to you, so use it as an asset,” says Bayley. “Use your own lessons and experiences as proof of your credibility because these items are unique to you and cannot be copied by your competitors. It’s very difficult to sell better, but it’s very easy to sell different.”

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