A weekly marketing column by Graham McGregor

Graham McGregor: Added value to differentiate your business

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How could you use added value to positively differentiate your business? Photo / iStock
How could you use added value to positively differentiate your business? Photo / iStock

A big challenge that many of us face in marketing is that we often have a lot of competitors.

And the reality is that many of our competitors are very good at what they do.
In other words, potential customers have a lot of different places that they can spend their hard earned money with.

So what can you do to encourage potential customers to choose your business over many of your competitors?

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One area to get a competitive advantage is this one.

Look at how you can 'add value' to what you sell.

I saw a great example of using added value in a coffee shop many years ago.

In this coffee shop the owner gave his clients a glass of iced soda water at no extra charge with every coffee ordered.

Now of course the clients' reaction was 'I didn't order that, why am I getting that?'

The owner of the coffee shop trained his staff to tell the story:

'The free soda water is to cleanse your palate so every single time you take a sip of your coffee you get to taste that beautiful coffee again and again and again'.

He also put a little chocolate on the side of the coffee cup and it was called Hasty Tasty and it had the name of the company, the coffee shop on the chocolate.

This was all added value.

What was the perceived value of this coffee?

Well back in those days it was $1.50 to have a coffee and when you added the soda water and a chocolate it was worth to the customer about $3.50. (However it only cost the coffee shop a few cents to provide this extra added value.)

Now someone paid the coffee shop $1.50 and they got $3.50's worth of value. So who do you think they told? They told all their friends.

'You've got to come here, they give you a glass of iced soda water and a Hasty Tasty chocolate on the side' so their sales exploded.

They went from zero sales to $10,000 a week in five months and the owner was able to sell this business for $230,000 by applying the principle of added value.

Added Value is a good idea you can borrow and use anywhere.

The reason it works so well is simple.

Everyone still likes a bargain; everyone wants a cocktail story to tell their friends of a great discovery they've made if you like.

Here's another example.

I bought a new car many years ago.

Three weeks after the purchase I received two free movie passes from the car dealer; along with a short note thanking me for my business.

When I brought this car; I was regularly speaking to several hundred business people a month at live seminars.

I told all these people about my delightful little added value bonus from this car firm. I also went back two years later and bought another car from the same firm.

In the book How Champions Sell is the story of Steve who was an industrial sales representative and sold hardware, nuts and bolts to industrial accounts. Steve dealt mainly with buyers in purchasing departments. His products were considered a commodity and he was under constant price pressure.

Now Steve was an engineer, and became interested in warehouse operations.

During some extended sales calls, and during some of his weekends, he worked with the warehouse manager of one of his accounts. Together they upgraded the accounts warehouse management system. This saved the customer hundreds of thousands of dollars. His customer was very grateful and gave Steve all his hardware business with little concern for price (as Steve was generally price-competitive.)

The owner of this company and the warehouse manager referred Steve to several other companies in the area.

Steve helped install the cost-saving warehouse system at some of these companies. He picked up their hardware business, again with little concern about pricing.

Soon Steve was calling on the owners of companies (not buyers) all over his territory. He offered the added value service of improved warehouse operations.

This was accompanied of course by the purchase of his hardware line.

Steve became the most successful sales person in his company.

Steve's added value service of helping his clients improve the efficiency of their warehouse operations is a perfect example of adding value to his customers.

The good news is that there are hundreds of simple things that any business can do to add amazing value to their customers and clients.

Many of these things are low cost and even free and can create remarkable increases in your sales.

It's worth trying added value in your own business as well.

"Do what you do so well that they will want to see it again and bring their friends" - Walt Disney

Action Step:

How could you use added value to positively differentiate your business?

- NZ Herald

Graham McGregor is a consultant specialising in memorable marketing. Download his 396-page Unfair Business Advantage ebook at no charge from theunfairbusinessadvantage.com.

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A weekly marketing column by Graham McGregor

Graham has had 36 years 'hands on' experience in sales and marketing. He has sold a range of services including advertising, sales training, personal development, life insurance, IT services, investment property and business consulting services.

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