Defining Value

The word "value" has been overused and its real meaning may be obscured by the frequency and variety of use. According to Webster's Dictionary it has eight distinct and different meanings. What is most appropriate to us in a business environment are the first three listed. Those are:

Some countries have even taken the obsession for the concept of value and made it the basis for a tax. It is an incremental excise levied on the value added at each stage of processing of a raw material or production and distribution of a commodity that has impact of a sales tax on the ultimate consumer. Some countries even tax "value."

What does "value" really mean and more importantly how do we define it? We all make a "value" judgment every time we make a decision. Before we make a decision we automatically consider the investment or cost of what we are going to acquire, or the act we are going to take, and compare that to the benefits we believe we will receive. In short, value is an equation comparing cost to benefit. We can picture it as a scale and when what we receive outweighs what it cost us to get it, we act. Organizations have to demonstrate compelling value in order to get and keep customers.

An important concept we must understand is that each individual does his or her own value calculation on every decision. While marketers and salespeople can compile lists and present information, it is not up to them to make the decision as to what is valuable and how valuable it really is. Remember, beauty is in the eye of the beholder, and so the perception of value is different for each person.

The concept of value is an essential element of the success of every business. It is considered as an element in commerce when goods and services are exchanged. It is considered even in relationships when commitments are made. Whether we are aware of this concept or not, it has a tremendous effect on the behavior of prospects, customers, and employees.

As an organization it is important to ask, "What is our unique value proposition?" In other words, what about us do prospects and customers consider valuable that makes organizations and individuals want to do business with us? What about our organization causes employees to be committed to the organization, its goals, and its customers? It is important for us to stay in tune with what prospects, customers, and even employees feel about the value we deliver.

The organizations that have gotten in trouble and been blind-sided by reality were those organizations that did not keep a keen sense of awareness of their value. They failed to deliver enough results for customers to support their cost. It's easy to see brochures, advertisements, and even hear pitches from salespeople that are stale and regurgitating the same information. Take the time to verify your unique value proposition.

Examine the material that represents your company. Does it really communicate the "value" you offer to all that do business with you? Is it compelling enough to persuade someone to become a customer or spend more for your product or service?

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