How to Deliver Value to a Customer

Understand that the first component of value is "utility." It means that whatever you are delivering to your customer has to be fit for the purpose the customer will give to it. In essence, for any goods or service you deliver to a customer, having utility means that the customer can enhance the performance of their own assets, or remove some sort of constraint that prevents them from receiving more value from their assets.

• If it is a car wash, the car has to end up clean.
• If it is a snow plowing service, the customer has to be able to traverse the path you plowed as the customer defined.
• If it is a cellphone, the phone must be able to receive a signal, the customer must be able to dial a number and connect to someone on the other end of the call.
• If a computer report, the customer will have to be able to click on a button on the screen, the report must come out of the printer and it must be complete and correct.

Know that the next component is "warranty." It means that the goods or services that you deliver to your customer must be fit for use.

• The car wash, for example, has to be open at the time the sign says the business will be open, and it must be able to handle the demand for its use, otherwise the line will grow long, customers will tire of waiting and will leave.
• The service must be as secure as the customer expects; no undue risks for the driver or passengers, for example.
• If the service fails, it should be restored within the period of time the customer considers reasonable, otherwise the customer will go find another car wash.
• The same concepts apply to all other goods and services. They have to be as available as the customer considers appropriate, provide the right capacity to meet the customer's demand, be as secure as the customer expects them to be and as continuous as is considered reasonable by the customer.

Strive to identify and overcome the barriers of the customer's perceptions. The easiest way to explain this is to think back to the day you bought your last automobile. Why did you pick that one? After all, all cars are the same –– four wheels, chassis, engine, transmission, differential, body, seats, steering wheel, glass, seat belts, etc... Or are they? The job of the salesperson who wants to make the sale is to identify these perceptions and determine the best way to present the service –– a car –– in a way that will convince the customer that this is the vehicle that meets all of the requirements, real and perceived.

• Some customers will buy on the basis of the perception of reliability, created through personal experiences and/or word of mouth.
• Some will focus on price.
• Some will focus on the capacity, or the comfort of the interior.
• Some will want speed, others think there can never be enough airbags on a moving vehicle.

The perceptions of the customer are what makes or breaks the transaction that exchanges value for money. For example, most people would not pay $100 for a can of corned beef, right? However, put a person in a situation where that person has not eaten for days and that's all to be found, and that person will exchange anything of value for that food. The art of selling boils down to finding what the customer wants that they consider to be of value, and convincing them that what you have for sale will deliver that value.

Remember that strategy and marketing are two different concepts.

• Strategy is about deciding what you will offer that is of value to potential customers, how that value will be delivered, and how you will convince the customer that the value the customer wants should be obtained from you. In short, it's about defining the value proposition.
• Marketing is about communicating the strategy and value proposition to a customer in a way that will make them want to buy the service or goods from you.