By Mack Hanan, Peter Karp
Offers a brand new method of promoting that emphasizes no longer competing at the foundation of the simplest cost, however the optimum worth i.e. demonstrating to present and people searching for products/services that utilizing your service or product will both lower their bills or enhance their sales. allotted by way of Gale. Annotation
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Additional resources for Competing on Value
When you sell, you know your products and services, their features and benefits, and their terms and conditions. As a customer, you know how much you pay. But what about the value of what you buy and sell: What about its contributions to your own growth and to the growth of your customers? What about how much you are adding to your competitive advantage and to theirs? Your managers will probably assure you that they know the values they add. You will be tempted to reassure yourself by speculating that, surely, your customers know your value.
Is it on their "must list"? If so, will it help us maximize our margins? If not, why should we go ahead with it? Classifying the Specifications of Value Customers are preoccuied with value. When they are presented with value that they can add to their business, they interpret it as an investment signal. Before they bet their money, they need to know how much value they will gain in relation to how much they will be required to invest. Their answer will be a composite of two functions: the dollar value and the time value of the investment's return.
This is their key to profits. If you can position yourself as a value-adder through revenue expansion, you have the best chance of becoming a customer's strategic ally because all businesses exist to make money. No business exists simply to reduce its costs. Yet cost reduction is often the only way a business, especially one that is mature, can free up funds for growth that can be used as the equivalent of new revenues. If you can add value only through cost reduction, you should present the costs you release from customer operations as equivalent revenues so you can still relate to-and be related to-a customer's primary money-making objectives.