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In my last post I talked about innovation and what that is, I did this as it is a buzz word topic that has gotten over used and warped out of context. To a certain degree the same can be said about added value. Creating added value for clients seems to be a buzz word solution which enables companies to confront the present and difficult business landscape with consists of saturated markets and an unprecedented economic recession. But what is added value exactly; this is my take on the topic.
I think we can all agree on the meaning of added in any context, so it’s simply more, extra. So the key is in the value. In general terms it is an increase in worth or benefit of a product, service, solution etc but the real catch and what makes it so interesting is that it is subjective. That means that it is not generic / objective, it is totally dependent on the subject’s, which is the customer`s, perception of the additional worth / benefit.
This might seem like an insignificant point but it is the essence of the issue and the key to succeeding in the creation of added value. If you do not understand that added value is determined by the customer’s perception of “it” you are doomed to failure or at the very least you are playing bingo, who knows you might get lucky!
So value is customer determined or triggered if you like. Unusual, right? Because how many products, services do know have branded or hyped “added value” without ever asking their customers what they think? I venture to say the great majority.
Only the end customer can give you that insight and determine if it is truly ”value” for them. You can obviously make insightful and educated predictions based on data / experience but they would be that; predictions. Until the customer perceives the new addition as value it is only an addition, a feature, an add on.
So added value is something a customer perceives as an increase in products benefit or worth. In addition I would venture to add another key factor when dealing with this topic: All added values have 1 common denominator, they solve customers’ problems!!!
Hence, the “take aways” from this post are:
- Added value is subjective: it is defined and determined by the end client, until which point it is merely an added feature, addition.
- Added value solves a problem for the customer. It is the resolution of the problem that generates additional worth or benefit for the customer.
Now you know what added value means, how do you go about creating it? In the next post I will focus on how you should go about identifying added value for your customers (internal and external) and then creating it.
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