The IT and telecoms industry coined the term ‘value-added’ a long time ago as a clever strategy to boost sales. ‘Value-added’ referred to enhancements, perceived expertise, or ‘freebies’ that are offered in addition to standard products, allowing a service provider to differentiate itself from competitors, and potentially charge a premium price.
Many years later and the IT industry is overcrowded by service providers, all describing their services as ‘value-added’ even though what they are touting as added value hasn’t really changed much at all. And with everyone offering it, customers now expect to receive these additional features or services. They have become the norm, and are no longer considered an enhancement or additional to the standard product and service. Their value has decreased in the eyes of the customer.
How did we end up with such a gap between what service providers are presenting as ‘value-added’ and what the customer perceives value to be, in a time where customer value is of utmost importance to the success of any business?
“Finding out what the customer truly values is critical to how the company produces, packages, markets and delivers its products.” – Investopedia
To bridge the gap and offer real added value, technology service providers need to have a true understanding of what customer perceive as value, outside of added extras and enhancements that their competitors are offering too.
So what does value mean to a customer?
Let’s look at an example here. One of my weaknesses is Asian food, and I am partial to a Chinese meal – either eating out or takeaway on a lazy Friday night. I always get my takeaway from the same Chinese restaurant. But it’s not the free prawn crackers that have made me a loyal customer – after all, the other Chinese takeaways in town also put these in your order free of charge. I even ask them not to put them in now. The main reason I always go back (apart from the fact that the food is always good) is that I’ve built up a friendship with the owners over time, and we’ve got to know each other as people. They suggest new dishes I might like based on my taste, and even ask for feedback on menu changes. This human connection and the feeling of being known, understood, and empathised with makes me feel valued and brings me back, to the extent that I now feel guilty when even considering going somewhere else! I’m sure if you think about it, you have a brand or business that you feel the same about.
People value human interaction, and like to feel valued themselves – and this applies in their working life as well as personal life, both of which are often closely intertwined. Yes, they like to get more for their money, but more doesn’t always mean add-ons and freebies. How about you make their job easier and perhaps even make it more enjoyable to engage with your company?
Towards a new definition of ‘value-added’
So if yours and my experience is anything to go by, then your customer is a human after all – not just a number, and not just a set of facts and figures you’ve managed to collect. Humans can be unpredictable. Humans can be influenced by their environment and those around them. Life sciences research has proven beyond doubt that we are not quite the rational beings we like to believe we are; emotions influence the decisions we make in a complex and wide range of ways. A framework developed by Pfister and Böhm (2008) goes a step further, suggesting that emotions play a more functional role by providing information, improving decision-making speed, assessing relevance and enhancing commitment. In simple terms, this means that our decisions are taken on the basis of how we feel, not just what we know.
So start thinking about your customers as fellow passengers on a journey into a shared future. People you share concerns, values, perspectives and even ethics with. You and they are one and the same tribe – united by more than a trading history or ‘behavioural score’ – connected by a narrative that no machine algorithm can adequately quantify, let alone satisfy.
You and they are one and the same tribe – united by more than a trading history or ‘behavioural score’
Now it is time to tell them a story – a meaningful story that will engage them emotionally, make them think, question their own understanding and belief, and want to find out more. Start a conversation, just like the owner of the Chinese restaurant did the first time I visited. Welcome them into your world, and let them shape it too. That’s how you create added value.
And furthermore, if you focus on treating your customers as humans, they might even end up telling your story for you…