As business leaders, we think about what we are building toward, meaning many entrepreneurs start their business plans with exit strategies. In that effort, then, they are more interested in the perception of value and the estimate of its worth, or its valuation.
Valuation is directly influenced by its useful or monetary benefits. How do your customers experience your brand? What benefits do they realize? If you can build the value you provide to your customers, you will be increasing the valuation of your company.
If you want the best results, your focus should be on the worth that’s right in front of you. And for any company — big, small, or otherwise — that’s your customer base. Making your customer the center of all your decision-making will foster a passionate, loyal audience that’s happy and enthusiastic about your brand.
Perception vs. Reality
Emphasizing value over valuation doesn’t mean valuation has no merit. It’s actually more difficult to create enough ongoing value for customers to build a highly valued, sustainable company over the long haul than it is to demonstrate a positive ROI in the short term.
Does this mean it’s harder to measure value? No, but so many professionals in the world focus on valuation that it’s become a more common measurement of financial success. But it’s still an estimate, and that’s sometimes easier to work with than an absolute.
While companies in any industry have the potential to build value, it’s often more obvious in “hard” products. For instance, if a customer buys a widget, that widget provides practical value if it does what’s promised.
But the place where value is most interesting is in the service industries, like tech or software. If you think of a software company, value comes from customer satisfaction and determining whether users will renew their licenses. Quality of service is determined by asking a number of questions: Does the software make their lives better? Does it improve their businesses? Is it meeting expectations?
To reach that desired outcome, a new department — the customer success group — has emerged in businesses. This team reaches out to your customers and ensures the product or service is meeting expectations. You’re focusing on creating value beyond what you sell, which feeds into a customer’s holistic experience of your brand.
Gain a New Point of View
Growing the value of your company often means shifting your mindset away from valuation’s perception to value’s cold, hard facts. The following can help you alter your mentality:
1. Know who pays the bills.
An Econsultancy Digital Marketing Trends survey asked companies what growth opportunities excite them the most — the top response was customer experience (21 percent). If you want to shift your company’s mindset to value, put the customer at the center of your decision-making process.
My first career role was as a sales associate for Nordstrom, and satisfying the customer was our top priority every day. Bring that kind of focus to your business and to your customer relationships; it’ll result in you being more focused on what matters to the customer, which in turn will create value.
2. Make each interaction count.
No one needs to tell you that your product or service must meet — if not exceed — customer expectations. But the quality of your product or service will only take you so far. You need to deliver value in every interaction with your customer base.
Take Google and FedEx, for example. Both companies are quite different, in that one delivers information and the other delivers tangible items. But they also deliver value beyond their primary service by ensuring that each interaction with their brand exceeds what’s expected of them.
Google nurtures its customers. If you’re a small business owner, it doesn’t just leave you high and dry to figure out AdWords on your own. It holds your hand, so to speak, until you feel comfortable managing your account by yourself. FedEx, on the other hand, helps you understand how its services can help you accomplish your business goals. It invests in your success by providing tips and solutions to improve business, creating happier customers with more revenue over longer periods of time.
3. See customers as brand advocates.
Research done by Customers That Stick estimates that repeat customers are worth as much as 10 times more than they are on their initial purchase. Whether voice, digital, or chat, all interactions need to play the long game. Determine what it’s going to take to satisfy and delight the customer and convert him or her into a long-term, passionate advocate.
Let’s say you bring in an analyst to appraise your company. He’ll place a numerical worth on your business based on numerous factors, not just the market value of its assets. Intangibles like what you provide your customers in services and experience play a big hand in assessing the value of your enterprise.
Our company, for instance, is helping small businesses get more value from Google and AdWords. Our ultimate goal is to improve the strength of the relationship between both parties so that it turns into lasting revenue growth for Google and long-term satisfaction for the customer. We sell AdWords to these companies, and then nurture them for up to three months to assure they are getting value from their ad.
We worked with that account for about three months to make sure it’s optimized and getting the most value it can from the new customers acquired through Google. We taught them how to take advantage of Google’s incredible data and analytics, and as a result the business is capable of helping itself over time.
How your customers experience your brand is where the true value of your company can be found. What are you doing to improve your worth?
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