You've probably heard the buzz word and may have wondered "what is value creation?" If you're like most sellers, you may have assumed this is the same as value added.
Creating value is not the same as adding value. The bar has been raised significantly by empowered consumers who are looking for better, more, different, special and unique.
Adding value is expected in the course of regular business, and it takes many forms like customer incentives, no-cost options, loyalty programs and giveaways. It involves taking something with a value and adding it on for the buyer.
Creating value goes further.
It requires identifying what would be of value to an individual buyer and then finding or making a way for that unique value to be realized. Unlike added value, created value is original and unique to the one buyer it suits. A seller would need to know enough about each individual buyer to fully answer the question "what is value creation?"
Buyer demand for value creation has come about through a trickle-down effect. Companies began focusing on value creation to meet shareholder demands as competition escalated for many industries in the 1970s and 1980s. Now, 30-40 years later, consumers have followed this same pattern of wanting more, and they want it to come directly from their sellers.
What makes this challenging for sellers is buyers don’t directly ask for value creation. Most buyers don’t even think in those terms. All they know is they want a little something more, something different from what everybody else is already getting.
What Is Value Creation and How Is It Different?
Take a look at this table to better understand the differences between value, added value and created value. Give yourself and your company a quick evaluation – what value are you delivering and which type of value could you increase?
With each buyer, consider the question "What is value creation going to mean for this unique buyer at this moment in time?" This is how you'll begin to create value and deliver it with a meaningful and relevant experience for your buyer.
