What do your customers value?

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. 

Case Study

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. 

Conclusion

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?

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SoftwareShortlist goes live

I’m pleased to announce that my own startup, Software Shortlist, has just gone live at www.softwareshortlist.com. It is currently in a public beta mode.

SoftwareShortlist helps small businesses find the best software for their needs.

How does it work? Well, rather than you scouring the web for information and spending days or weeks assessing whether particular software solutions meet your needs … now you can quickly build your own customised shortlist of the most relevant software. Software Shortlist provides free and independent recommendations, side-by-side comparisons, software reviews, plus a wealth of information and articles.

We believe it is going to change the way small businesses find software.

Timesheet software (also known as time tracking software) is the initial niche we have focused on for the beta launch. After reviewing over 60 different solutions, we have hand-picked the very best ones across various price points and customer segments. A few more additions are in progress to round out the offering, but the core service is up and running.

Coming soon on Software Shortlist will be some of the big software categories such as Accounting and CRM software, as well as many industry-specific niches such as livestock recordkeeping software for farmers. We will be partnering with experts and industry associations to help review software in a broad range of areas.

I’d love to hear what you think – feel free to comment below (or contact me via email)

Cultural Entrepreneurs

It was great to see Zudio Music take out first prize at the recent Melbourne University Entrepreneurs Challenge (MUEC) with their Band Manager service. Why? Well, there are a few reasons. Firstly, knowing the guys behind it and how much effort they’ve put in over the years, it’s nice to see them earn a bit of kudos. Secondly, because it is a great example of a new business venture doing something fundamentally useful for their target customers. And thirdly because it is a powerful example of what I’d like to call "cultural entrepreneurship".

Cultural Entrepreneurs 

Melbourne is widely regarded as the most cultured and European of Australian cities. Arts, fashion, food, events, culture – it’s about enjoying the good life, rather than worrying about who has the faster car or bigger TV. 

By providing an online service to help bands and musicians get themselves organised, Band Manager helps support and grow the wonderful cultural life in Melbourne.  And like many cultural entrepreneurs, the business grew out of the passion and experience of the founders – they were solving a problem they had personally encountered in managing indie bands. 

The Band Manager Toolkit

That solution took the form of a calendar-based application to help organise (notoriously disorganised) bands. Around that core platform they have built a range of simple yet powerful tools for bands – including updating the band’s website, keeping track of their playlists, distributing their music online, and managing their fan database, including sending emails and SMS messages about upcoming gigs. They even help bands claim their live performance returns from APRA (which few typically get around to doing otherwise!)

That’s not to say that Band Manager is perfect. For one thing, I’d like to see them shift their revenue model towards ‘pay as you go’ services (like email and SMS delivery) and remove the setup fee that creates an unnecessary barrier to trial. But at least they know their customers and have developed a product that solves a real and valuable set of needs.

Other Cultural Entrepreneurs

The good news is that Melbourne has many entrepreneurs pursuing opportunities that enrich the cultural life of the city. 

RedBubble is one example, an online art gallery and creative community that is among the more successful of Australia’s web 2.0 startups. Chocolateria San Churro is another, bringing the joys of Spanish chocolate culture to locations around town.  The Rooftop Cinema in Swanston St and Moonlight Cinema in the Botanical Gardens have become popular destinations for film-lovers and anyone who likes a good outing. And an interesting startup to look out for is Laneway Magazine, an online publication (coming soon) which will celebrate Melbourne culture and lifestyle.

No doubt there are plenty more out there. Feel free to add to the list!