Value as a part of your strategy

Business strategic planning should always include a focus on value. Value for products and services is defined in the dictionary as ‘an amount, as of goods, services, or money, considered to be a fair and suitable equivalent for something else.’

I got thinking about value yesterday while doing the dishes and cleaning up the kitchen after another great meal that my wife prepared. I’m actually quite good at this cleanup activity (please, no calls to come over to your house!) and I really don’t mind doing it. Call me a neat freak.

Over the years I’ve used a variety of dishwashing detergents and there are definite differences between products. The latest detergent I’m using is the run-of-the-mill Safeway brand product. It’s pretty darn cheap. Prior to that, we were using either Palmolive or Dawn- both more expensive products. I can assure you there is big difference in performance between the less expensive and more expensive brand. The more expensive brands do a much better job and use a lot less liquid detergent. In the end, they are more cost effective and satisfying to use. The value is higher in my mind.

Certainly, business strategic planning should have at its core a long range goal to build the value of the company.  When the eventual liquidity event comes (a sale to or a merger with another business, or a transfer of ownership to family or other stakeholders) the goal should be to have the maximum return on the total capital invested. Value delivered to external customers and suppliers and internal employees are all a part of the total value equation. Your brand strength is a part of this also. What’s in a name? Plenty.

You may have your own business or may work for someone else. How do you get your business in a position to been seen as having the most value for your product or service? Here are just a few ideas:

• Develop great customer service and continually improve it (and remember, you are a part of the service). Not good customer service- great customer service. Customer service is exactly what it says- serving the customer, in all that you do. Among other things, it’s returning phone calls promptly, meeting commitments to send information on time, solving problems quickly and with a positive, can-do attitude, checking on order status without being told to do so, and being an advocate for the customer within the business. Great customer service makes the customer feel that you are a part of their team.
• Develop, document and train in standard processes or business practices that make your organization run like a fine tuned Swiss watch. Most people are familiar with the book The E-Myth by Michael Gerber. One of the main points he makes is that your business should have every important process detailed. With these in place, cross train your employees so that just about everyone in a department can step up and handle tasks or challenges without missing a beat. That’s valuable.
• Do all that you can to make certain that your product quality and delivered services are as close to six sigma as possible. When you continually deliver a great product or service to your customers and they know it will conform to or exceed specifications or expectations, you are enhancing your value in their eyes. Why would they turn to someone else? You are a trusted resource. You have value in helping their business to succeed.

These are just three ideas, but I’m sure that you get the picture. Here’s the summary- literally everything you do in your business, be it marketing & sales, manufacturing, logistics, finance…whatever, has an impact on value. Having a strategy that actively looks at increasing your value is critical.

So, does your business strategic planning include building value? Every day on the customer side of things, your business faces the scrutiny of whether your product or service has more value than other available options. Will it deliver the expected performance or result at a price that is acceptable and defensible?

 © 2010 Peter E. McDowell

Pete’s View

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Sales Focused Business Strategies – Business Strategic Planning – Business Best Practices – Revenue and Profit Growth

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