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Creating Value for Your Customers

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Creating Value for Your Customers

Smart leaders, when asked if they’d rather be feared or respected, choose respected. Similarly, smart entrepreneurs, when asked if they’d rather be the price leader or the value leader in their segment, choose value over price every time.

Why?

Just as there is more longevity in respect than fear, there is more profit in value over price. Creating value for your customers, when done well, can render your business price insensitive—up to a point.

Value Defined

When applied to ecommerce, value comes down to what you do for customers that others either can’t, or won’t. Let’s say your price is $5 higher than your nearest competitor’s on a given item. However, you provide a 30-day, 100 percent satisfaction guarantee, free overnight shipping and returns, a host of video tutorials and 24-hour-a-day customer support. Meanwhile, your lower-priced competitors offer none of those.  How much difference do you think that $5 will make to a customer in the face of all of that? Those perks are the value your customers derive from doing business with you.

What Customers Really Want

Of course, some of those things might not matter to some people. So, rather than considering those offerings a blanket list when it comes to demonstrating value, you have to take some time to get to know your ideal customer.

This will help you figure out what will move the needle for them.

What problem are they trying to solve with their purchase? What pain point is the item intended to alleviate? You’ll be in a better position to provide the services your customers will find valuable when you know what they are really after.

Price Your Products Wisely

First and foremost, you have to keep your eye on what an ecommerce store is. Shopify, the leading e-store platform provider, defines it as an online destination at which goods and services are sold. Given this understanding, your business should have two solid goals: inciting repeat business while maximizing your profit to the highest degree possible.

In other words, you can charge $10,000 for a pair of basketball shoes, and deliver them with all sorts of wonderful perks. However, the market for that shoe is extremely limited and you will sacrifice a great deal of revenue.

Yes, customers who perceive a lot of value in your offering are usually willing to pay more. However, you still have to remain within the realm of competitiveness, even while offering service above what is expected.

Show Your Best Customers the Love

If you have to choose between offering discount pricing to a customer you’re trying to woo and a customer you already have in the fold—you’re better off giving the existing customer a deal.

And we do know that sounds way counter-intuitive.

However, why bend over backward when you have no guarantee that new customer will be a repeat customer?

Draw them in with your value proposition first. Then, toss out a bone every now and then to keep them coming back. Include a free gift with their purchase—without telling them you’re going to do so. Give them a surprise discount at checkout. Gestures like these will keep them returning for more.

Creating value for your customers is simply a matter of understanding value in the first place. Getting to know your customers, pricing your wares wisely and showing your best customer you appreciate their business will follow. Learn how to do this on a consistent basis and your online enterprise will thrive.

I am the founder of Startup Today. I am the main writer and have put in many hours of work into creating this blog. If you want to find out more about me then lets get in contact.

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