Business Value as Products and Services
As business owners, we often have to step back and ask ourselves, “Will this bring value to our business.” Sometimes “this” is an upgraded technology that will make the inventory process easier or a promotional offer to increase seasonal sales. While those are important, an interested business buyer is going to look first and foremost at what you’re offering your customer. Products and services have the potential to hold the lion’s share of your business value.
When your customers find your product or service, it’s because they’re trying to solve a problem. Sell sunglasses? People want to protect their eyes. Sell lawn care? People are tired of dealing with the lawnmower.
Understanding exactly where your product fits into the supply-demand equation can be a difficult one, especially when you factor in outside considerations, such as the income levels of the people around you or the current saturation of the market.
Here’s an example: While true that everyone needs pots and pans to solve the problem of “How am I going to cook dinner tonight,” most people aren’t still asking where to get them. If you’re adding another ho-hum kitchen set to a market saturated with every pot and pan imaginable, it’s going to be challenging to make your presence known in the fine china business.
On the other hand, if you’re the only person who sells coats in an Alaskan town, you’re probably going to get a lot of business. You’re the only person providing supply, and many people are going to be asking, “How do I stay warm” once winter comes.
When it comes down to brass tacks, you have to make your customers want to buy your product or service because it’s going to add value to your business. You’re not going to get a buyer who wants to take over your business if you can’t sell what you’re offering. It’s just not a sound investment for the investor in question. So, how can you use your products and services to help your business value increase?
Prove Your Worth, Over and Over Again
It’s not enough to create one ad campaign on Google, then cross your fingers that someone might notice it. You have to be aggressive, and you have to know what your business is worth if you want your commodity to truly add value.
What makes your product special? What makes your service better than a competitor? What does your business bring to your community that makes it a better place to live? Take these positives and use them as leverage to increase your sales.
For example, many makeup companies advertise that they are “cruelty-free,” meaning that they don’t test on animals. Why? Because consumers feel good when they use products that support the causes they believe in or that don’t come with more extensive, societal consequences. It’s the same reason that reusable straws, washable zip-seal bags, and beverage can rings that decompose in the water are popular items right now. If it feels like philanthropy, it feels better when you buy it.
Another example is small business owners who host community events, like restaurants that feed people for free on Thanksgiving or a t-shirt printing company that donates misprints to a homeless shelter. What feels like a massive investment on the front end pays off in the long run because people feel good about contributing to the business’ ability to continue their service to the community. Plus, it’s just nice to give back.
Do It Faster Than Anyone Else
We want fast cars, fast phones, and fast results. We are a society that craves instant gratification. Whether that’s good or bad, we’re not here to determine, but it does mean that a company that fulfills its obligations to consumers is going to be preferred over one that doesn’t.
Think of a company that you pay a little extra for because they give you what you need faster than anyone else. Perhaps it’s your favorite barbershop that never has a line or a local diner that can get you in, out, and fed in under 30 minutes. Why do you like them compared to the other guy?
Amazon made $232.88 billion in 2018. Eighteen billion of that came from customers paying for Amazon Prime. Their Prime subscription motivates people to purchase through Amazon, rather than other online sellers, because of the two-day shipping. If you find the same product for the same price on two different websites, but one offers faster shipping, which are you choosing?
If you can give your products or services a speed boost, it certainly looks better alongside other competitors who are selling similar commodities.
Create a Customer Service Experience That Goes Above and Beyond
In a 2017 study, American Express found that more than half of Americans decided not to purchase a commodity because of a bad customer service experience and that 33% of Americans would consider taking their business elsewhere after just one bad interaction. Even more shocking, Americans tell an average of 15 people about a bad experience, versus an average of 11 for good service.
Those numbers are scary, especially if your business has some work to do in the customer service department. How many dollars have walked out the door (or never come in the door in the first place) because a friend of a friend saw you get frustrated? It’s not fair– we’re all humans, and we all have off days. Unfortunately, it’s the reality of the situation.
People are emotional creatures, and we seek warmth, empathy, and understanding. Customers want to have positive interactions, especially if they feel that a company has wronged them in some way. No matter who’s right, providing an incredible customer service experience is going to add value to your product or service.
Let’s suppose that you own a veterinary clinic in a small town, and there is another clinic twenty minutes away in the neighboring city. What can you do to compete? For starters, you can have a nurse on hand 24/7 to answer questions. People love their pets, and when their pets do something strange, it’s hard to fight the urge to jump in our cars and care for them.
Keeping a rotating staff of nurses online for 8-hour shifts during the day on Saturday and Sunday puts you in a position to a) provide a service that your competitor is not and b) invite the customer to come into your office on the next business day to get their furry friend checked out. It’s a little human touch that acknowledges that we want to keep our loved ones safe and that this feeling is being valid.
There’s no limit to the ways that you can use your products or services to add value to your company. Finding thoughtful ways to make your commodity an invaluable one is going to make the sale of your business much more lucrative and efficient.
When you lay out all the ways that you have successfully and creatively engaged with your community and resources to provide a valuable product, it’s going to be hard to turn a sale offer down. Stack the deck in your favor as you near a business transition and watch the value reach new levels!
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