7.2 Value: the fundamental equation
Value added; service value - what do these terms really mean? It seems different things to different people. The term value seems to have different meanings. Stop for a moment and think about what you consider it means in reference to service provision?
Now, consider these definitions:
- a good deal for what you pay
- a service offer that brings innovative benefits
- an offer that is more than what is currently available.
Once one defines value it becomes easier to translate the definition in encounters with customers. One popular idea of value is that Customers receive value when the benefits for a product or service exceed what it costs to acquire and use it (you met this concept in the previous chapter). A benefit is what the product or service does for the customer. If your services are better than or different from those offered by your competitors, but cost the same, then you are offering better value .
The extra benefits must be salient to the customer to "add value". An example, may clarify:
- Many publishers offer case studies and/or readings with their strategic management textbooks. They tell us that they are "adding value" for a small additional fee - however, as we have our own "marinated" examples and cases, their general products are of less value to the maritime customer (however, they certainly "add value" to another customer).
The next reading looks at complaints and creating customer value. We will cover customer complaints in a later chapter.
Reading 7.2
Benjamin, C. 2000, "Complaisant or complacent?".
The following reading identifies four types of values.
Reading 7.3
Dwyer, J. 2002, extract from "Customer service and public relations".
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