Strategic Coach Resources

Understanding what people value in any situation, what they’re willing to pay for, remain loyal for, and refer you for.

Lots of talk, not so much help.

People often talk about “value creation.” They say it’s what you have to focus on to distinguish yourself from the competition and to keep clients and customers coming back. Unfortunately, what they don’t say is how to create value, and that’s the real trick. A deep understanding of value creation truly can transform your business.

Creating value is not as simple as doing more for your clients and customers. Real value creation is in the eye of the beholder, which means you have to do what means more to them. You can spend a lot on market research to try to figure out what this is, or you can ask your clients directly. They may or may not be able to tell you, depending on how you ask the questions. Next month, we’ll talk more about that. But for now, even if they can tell you what they want from you, there may not be enough consistency in their answers to provide clear strategic direction. Even if they say they want it, will they be willing to pay enough for it to make it worth your while? For those of you who have been looking for a simpler way to stand out, build customer loyalty, and increase revenues and profits, we’ve found that, in any relationship, value creation boils down to providing just three things.

Three things everyone wants.

What people really value in any situation, what they’re willing to pay for, remain loyal for, and refer you for, are leadership, relationship, and creativity. Each of these three elements provides something specific that improves a person’s life in a way that’s meaningful to them.

Leadership: providing direction.

Providing direction can mean eliminating a person’s dangers, maximizing their opportunities or providing them with a plan and a path. You have wisdom in your area of expertise. This is the reason your clients and customers come to you. By applying your wisdom to their most pressing issues, you make their problems go away and open up new possibilities for them. This is immensely valuable. Yet many entrepreneurs discount this aspect of what they do for their clients and customers. Few charge for their leadership, preferring to use it as a loss leader to sell a product or service that is really no more than a commodity. Are you giving away the most valuable thing you provide?

Relationship: providing confidence.

Providing confidence is about reinforcing another person’s strengths, providing the support they need and giving them the confidence that what you’re doing for them is part of a process that you have lots of experience delivering. The experience you have creating consistent results in a particular area, can make you a tremendous source of confidence for your clients or customers.

Your credentials, track record, and reputation all offer proof of your ability to deliver solutions. This reinforces people’s trust in you as the right partner to help them with a particular aspect of their lives, or the right person or place to go to when they need something particular. Price immediately becomes less of an object. Shopping around is no longer an issue. You become the one they want to refer to others. When people have a really great experience and they feel that they’ve found someone who can really take care of a certain issue, they generally want to share their discovery. They want others to also experience the positive feelings they associate with you and your company. How do you currently provide confidence to your clients or customers? Are there ways you could enhance their experience to create more value for them in this way?

Creativity: providing capability.

The best new capabilities enable people to think and act differently in a way that creates a better result. Great products, services, and experiences often give people capabilities they didn’t have before. These may include specific skills, new tools, or systems and structures that help people integrate new information, changes, ideas, technologies, people, or things. When you give people creativity, you give them the capabilities that allow them to have a more flexible and adaptable approach to their futures. They are able to think and act more creatively and respond more effectively to the dangers and opportunities they face, while maximizing their existing strengths in new and exciting ways.

Most entrepreneurs do not charge for some of the most valuable things they provide, namely their wisdom and the process they take clients and customers through.

There are opportunities in virtually any business to provide more capability. Sometimes it can be as simple as more clearly sharing with clients or customers a bigger picture you have that can help them be more creative in their decision making or planning. Sometimes it means packaging your skills or the skills of key members of your team so that more of your clients and customers can benefit from them. If you want to upgrade the creativity you provide, you can start is by looking at what skills, integrative systems and structures you currently provide to others. How do you increase their capabilities in areas that matter to them? How aware are they that you’re doing this? Can you be more proactive and consistent about doing it? Sometimes whole new areas of business can evolve out of providing clients and customers with new knowledge and capabilities that enable them to better use products and services you sell. In many cases, we’ve seen these new sources of revenue quickly surpass the revenue and profit generated by the commoditized products and services our clients have sold for years. A nice by-product is that commodity sales tend to increase as well.

People value what they pay for.

An interesting thing happens as soon as someone writes a check. They immediately become more committed to what they’ve just paid for. It goes the other way too: As soon as you make something free, people value it less. This has important implications as you consider how you really create value for your clients and customers and how increasing the value you create can help to grow your business. Most entrepreneurs do not charge for some of the most valuable things they provide, namely their wisdom and the process they take clients and customers through. The reason they don’t charge is twofold: First, they don’t really understand or acknowledge the value these things provide, and second, it’s not the normal way of doing business in the industry. Breaking out of this proverbial box will allow you to permanently escape the pressures of commoditization of the products and services you sell, to completely differentiate yourself from competitors, and to build customer relationships based on a strong degree of trust and loyalty that lead to more business and more referrals.

The transition from selling products and services to charging for your wisdom is a big step for most entrepreneurs. It requires not only a different mindset, but often acquisition or development of significant new capabilities in the areas of packaging and marketing. Nonetheless, we’ve seen many entrepreneurs in our Program make this transition in three to five years and never look back. The first step in this long-term strategy, which pays dividends along the way, is to recognize the value you’re already creating for your clients and customers, to see what it is that makes them come to you instead of a competitor. The more you can use this as the core of your selling proposition, even if you don’t yet feel comfortable charging for it directly, the closer you will be to developing and packaging a process you can charge for and the farther you’ll be from just being another seller of a commoditized product or service.