WMA Headlines September 2020July 27th, 2021 by Nathan Hobbs
Value Added: What Does it Mean and How Can it be Applied to Products and Services?
By Dennis Berry
As a teenager in the 1970s, I worked at the family lumberyard on weekends, school holidays and summers. It was a small, independent yard in central Florida, where we serviced a mix of contractors and walk-in do-it-yourselfers. We were a high-service lumberyard, where virtually every customer received one-on-one, personal attention from start to finish. Any floor salesperson working for the company became familiar with every product category we sold and could credibly help customers across a wide assortment. As one of those floor salespeople, I would assist in helping them find what they were looking for, write up sales orders and ring up customers. If it involved a product outside, I would personally escort the customer and load that product into their car or truck. At the time, I’m not sure I ever heard the term “value added,” but that’s just what we did as a company to distinguish ourselves from the competition.
As consumers and businesspeople, we all have at least some understanding of the term “value added.” Webster’s dictionary defines it as “relating to or being a product, whose value has been increased, especially by special manufacturing, marketing, or processing.”
If you are in business, you are selling a product, a service, or both, and because you intend to sell that product or service for more than you paid for it, you must add some type of value to entice buyers. Here are a couple of examples:
Availability: The value could simply be that you made an everyday item or service readily available. For example, some people might be willing to pay $1 a gallon more for milk sold at convenience stores.
Tangible differences: At opening price points, paint that takes two coats to cover and needs to be redone every three years has its place with some consumers. Others will pay more for a somewhat higher cost paint that promises to cover in one coat and last twice as long. Provide me with hard hitting bullet points, supporting indisputable proof and five-star reviews, and I might be convinced to pay more.
Step-up services: For instance, some are willing to pay a higher price for “sedation dentistry,” because they prefer not to be awake while the dentist is drilling in their mouth. It’s something not every dentist offers, which means a higher price can be charged. What can you reasonably offer as a value-added feature for your products or services that will set you apart? First let me suggest what not to do. Don’t offer something for free that is easily replicable by your competitors.
In terms of what you can do:
Offer unique features and benefits that can be readily demonstrated to have real value. With products, a unique feature might involve a patent. With service, it may simply be a strong commitment. It could be no damage—ever. In the event there is, you jump through hoops to fix it.
Create a culture that bleeds customer service. Customers can sense this. They know when it’s there and when it’s not there, as well as when it’s contrived and when it isn’t.
Lastly, don’t forget that new and better products and services are a way of life in America, where we’re been heavily impacted by an entrepreneurial spirit. The idea that there can always be a better mouse trap is what keeps good companies with good people going every day.
Dennis Berry is immediate past chairperson for WMA and senior vice president of NHC Sales and CPM for The Empire Company.
To view the laid-in version of this article in our digital edition, CLICK HERE.