The Growth Coach

Views From The Coach

 

August, 2012

Greetings!  

And you thought it was hot last month! Heat isn't something you get used to, it's something you adapt to. We can't control it any more than we can control the economy. We can, however, adapt to both. Adapting to the heat requires slowing down. Adapting to the economy requires a different approach.

Perceived Value

There's price and then there's value. One is objective, the other is subjective; one arbitrary, the other negotiable. Or so it seems.

 

Think of your time. What is it worth to you? What is it worth to an employer or to a customer? Those values are perceived in different ways because someone is a seller and the other is a buyer. That's why sellers sometimes like auctions. They get likely buyers to bid against each other for an item. It quickly establishes what an item is worth to the bidders - to those present at that moment in time. It could be worth something very different at another time and place.

 

Why is perceived value important? Because, as a seller, you can affect what people perceive. If you understand what is of value to the buyers, you can influence their perceptions. Buying choices are made most often based on value. They're emotional. Think about how your choices have changed because of your values. When was the last time you walked into a bank branch? Why did you pay with a credit card instead of cash? Why did you get pizza delivered instead of picking it up or actually eating at the restaurant?

 

Think about it as a simple formula. Perceived Value = Actual Cost + Added Value. The coupon mailers illustrate this principle very well. A local restaurant might give you two entrees for the price of one or a discount of 20% on your food. That discount might get you to change your typical behavior because you perceive that you are getting more for what you are actually paying.

 

What can you do to increase the perceived value of your products or services? Very often it doesn't involve spending money. Do your customers value personal attention, personalized service, efficiency, or valuable information? By increasing the perceived value of your products or services you can increase your income without increasing your costs. It's not about price, it's all about value.

Focus on Sales

Discounts are always a problem because they can lower the perceived - and actual - value of your goods or services. They should be used only with a clear objective in mind: to get customers in the door, to avoid losing a sale, or to retain a customer. That means they need to be time limited, you need to set the customer's expectations, and you need to understand what's driving the customer's decision. If you can do that, you will control the transaction. If you can't, your competition will. 

Networking Tips

What value do you bring to a networking event? How can you bring value to the conversations you have with the participants. Most importantly, how do you want them to remember you? You shouldn't be trying to sell anything. Nor should you be giving it away. Your objectives should be to discover and build profitable relationships. The first step is to understand what others perceive as valuable. Most people won't tell you that straight away, you will need to ask a series of questions to uncover it. Armed with that information, you can have a valuable conversation.


If you have ideas for future issues or questions on this one, let me know. Who do you know who would enjoy reading these articles? Use the "Forward to a friend" link below.

 

Still Cool,


Dave Ferguson
The Growth Coach
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An Unusual Opportunity

I don't know about your business, but I find mine is slower in the summer. I'm not bored, but I like interesting things to do. So, for August, the first five people who call me and request one will get a free session - there are no strings attached and no prerequisites, but this is not for existing clients. I want to hear about a business I don't yet know, to help a business owner I haven't yet helped. Yes, it sounds a bit selfish, but you might find it to be of value.

 

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