Why Value Addition In Business?
Does your businesses satisfy customers through the products and services that you offer? As businesses need to set themselves aside from the normalcy and apart from other businesses through value addition, not only will they be unique but also make reasonable profits.
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Adding value is an important strategy of a commercial entity as this process provides incentives to customers to purchase their products that in turn increases the bottom line of the business. Carefully thought-out value addition can provide immense benefits to the customer whilst increasing market visibility for the business.
As the first step in deciding the method of value-added selling, it is imperative to understand what the customer values with the product offered to sell. The transactional customer, who concentrates only on one instance purchasing, wants the right product at the lowest price. The customers who are having a relationship, whether long or short, need the understanding of the seller while informational customers need as much information possible from the seller before making the buying decision.
Value addition can be done by doing the following;
Delivering goods on time – Reducing the cycle time of our product delivery will make our customers in a happy mood even before they use the products. A bad product is what makes a customer unhappy, before eventually turning to the competitors. Being able to provide a fast turnaround time also means being able to anticipate customers’ needs, and give them what they want even before they ask.
Bundling and packaging – You can add more value to your products or services by improving their packaging or design. The beautiful design of your products or their packaging will create additional perceived value in the eyes of your customers. Your customers the first thing that they see and feel is the packaging and design of your product they are interested in. When they have a choice to choose from different products on the shelf, the packaging is something that will make a difference in their subconscious mind. So, it will impact their decision related to purchasing. Your product’s design and the package should be attractive and informative enough to help your customers to decide to buy them
Service levels –It is possible for you to differentiate yourself not only by providing a higher level of service but by adding different levels of service based upon someone’s size, frequency, or amount of purchase. Good service will automatically win the heart of a customer, this will encourage the customer to choose to do business with you.
Focus on what you can do – One way to add value is to focus on what you can do, rather than what you can’t. You can apply this mindset in a variety of ways, including spending fewer resources on customers who aren’t likely to make a purchase or on products that are less successful.
Adjust your marketing strategy – Create market segments to help you decide where and how to advertise your products or services. When highlighting its benefits, consider the intended audience to emphasize the ones that resonate with their wants and needs.
Why is value addition so important to your business?
- Making more profits.
Value addition allows businesses to charge higher for their products this is because customers are more than willing to spend on products that have value addition when businesses charge higher prices for their products they tend to have a higher profit margin which in turn enables them to earn more profit.
- Growing of market share.
Adding ongoing added value to what you sell can help you position yourself as an expert in your industry, thereby improving your brand. Your customers tend to be hooked up to your business as they will be coming back for more purchases. For instance, if you sell electronics and give your customers a year warranty or free repairs within the year of purchase, this kind of value addition helps you to stay on top of your competitors who are selling the same product.
- Standing out from competitors’ products.
In adding value, businesses can add unique features to products. Such features make their products stand out from competitors’ products. By offering uniqueness, they can charge a premium price, but, on the other hand, it also attracts consumers, and they are willing to buy it.
Another way to make a product stand out is to offer a slightly lower price than the average competitor. Because it is more affordable than competing products, it makes consumers more likely to choose the company’s products. As a result, they can save money by buying the product and spending less money. Even if the prices are lower, the company can still generate high profits if the production cost is lower than the competitor.
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Value addition is what makes more businesses continue to survive in this constantly changing marketing landscape. Choose a way that you will stand grounds on to value addition, you can have the best packaging, quality after-sale services, deliver your products faster to customers, adjust your marketing strategy or even focus on what your business can do, all these will eventually make your business stand out of the competitors, make more profit and grow a wide market share.
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