We all know the saying: “the customer is always right”. While not entirely true, this little quip is spot-on when it comes to defining what value your business delivers.
By value, I mean what it is about your business products, services or offerings that potential customers care about and (ideally) are willing to pay for.
You probably have your own theories about the value you deliver to customers. I’ll go out on a limb and say that you’re probably wrong. Or at least not totally correct.
Let me share with you a real-life story about customer value.
A client of mine sells online assessment products. One is a simple summary report, which shows your scores; another is a full report, which includes not just your scores but also practical advice and strategies on how to improve.
In my client’s mind, the real value lies in the practical strategies, not the scores. These strategies were hard-won insights from over a decade of consulting and coaching. After all, it is the practical strategies that help you achieve tangible improvements, not simply knowing your score.
But they were wrong. We did a little marketing experiment on pricing, and learned a surprising lesson that many customers had a different view on where the value was.
Here’s how it worked. We gave some people a free summary report and followed up with a special offer to upgrade to the full report. By varying the upgrade price offered to different people, we expected to see the conversion rate change and work out how many people would pay how much extra for the coaching strategies.
However, the conversion rate was (1) much lower than expected (2) very similar across all price points.
This told us that many customers had already received what they saw as valuable: namely, their scores. And those people who valued the coaching strategies were relatively indifferent to price.
It’s an important lesson: You may think something is valuable but your customers are the ultimate judge.
Do you really know what your customers value? Have you asked them? Or more importantly, did you observe how they behave? (Actions speak louder than words!)
Has your company run its own experiments to systematically explore what your customers value? If so, feel free to share your story below. If not, what are you waiting for?