How to anchor the idea of values in your corporate strategy
Jonas Reuter
Value plays a central role in today's business world. Companies that focus their strategy on the value of their products and services have a decisive advantage over the competition. This advantage can manifest itself in the form of higher customer satisfaction, greater customer loyalty and higher sales. This blog post aims to demonstrate the importance of the value concept in corporate strategy and its impact on value-based pricing.
Value-based pricing: focus on customer benefits
The term "value" can be defined in many ways, but in its simplest form it is the relationship between the benefit a customer derives from a product or service and the price they pay for it. Value based pricing is a pricing model that focuses on the value a product has for the customer. This method was first introduced by W. Edwards Deming in the 1940s and has played an important role in business practice ever since. According to a publication by Bain & Company (2000), "it is an effective method of maximizing customer value, and thus customer benefit, by aligning product prices with customers' actual benefits and willingness to pay".
Recognizing and fulfilling needs: The path to a value-oriented strategy
In order to build a successful corporate strategy on the idea of value, companies must understand their customers and take their needs and wishes into account. This can be achieved through regular customer surveys, market research and close cooperation with the sales department. In addition, the company must constantly improve its products and services and adapt them to changing customer needs.
Employee satisfaction through a customer-focused culture
A strong sense of value can also influence the way the company operates. A corporate culture that focuses on adding value for the customer leads to greater motivation and satisfaction among employees and better customer service. An example of this is the American company Ritz Carlton, whose motto "Ladies and Gentlemen serving Ladies and Gentlemen" shows that they focus entirely on adding value for their customers.
A clear focus on added value for the customer should also be anchored in the corporate strategy. This can be supported by clear targets and indicators that focus on customer value. A regular review of these indicators can help to ensure that the corporate strategy is constantly improved.
Nevertheless, it is important to emphasize that a corporate strategy based on the idea of value cannot be implemented overnight morgen be implemented today. It is a long process that requires continuous improvement. But the result is worth it. Because companies that focus their strategy on the value of their products and services have higher customer satisfaction, greater customer loyalty and higher sales.
Successful value propositions: How to formulate a targeted strategy
As Michael Porter emphasizes in his book "Competitive Strategy: Methods for Analyzing Industries and Competitors", a company should build its strategy on a unique value proposition in order to be successful. One example of this is the US company Patagonia, whose strategy is based on sustainability and environmental protection. Another example is the German company Aldi, whose strategy is based on offering high-quality products at a low price.
To formulate a successful value proposition, the following tips should be considered:
- Identify your target audience and their needs.
- Offer a unique value proposition that is relevant to your target audience.
- Consistently anchor your value proposition in all aspects of your business.
- Review and adjust your value proposition regularly to ensure it is always current.
- Communicate your value proposition clearly and simply to ensure it is understood by your customers.
A clear and well-articulated value proposition is an important building block for a successful business strategy that focuses on adding value for the customer.
Create added value, reap success!
In conclusion, it can be said that anchoring the value concept in the corporate strategy is a challenge, but the result is worthwhile. Successful implementation can be achieved through close cooperation with sales, an understanding of customer needs and continuous improvements. Companies that anchor the concept of value in their strategy will be more successful in the long term.
10 impulses to increase the value of your services
You have seen the impulse questions at the end of this article and perhaps you have already started to formulate your own answers. But what if you had the opportunity to discuss these answers with experts and delve deeper into the subject matter?
We invite you to take part in a free 30-minute sparring call. In this call, we will go through the value, product benefits and performance of your products or services together. We will help you structure your thoughts and make clear distinctions that can help you shape and communicate your offering more effectively.
We ask the right questions
Our workshop card set includes a selection of around 50 cards with impulse questions on the topics of sustainability, digitalization, values and customer centricity, which you can use to work on new business models. You can find more impulse questions in our digitalization tool MORGEN People.
We facilitate the exchange of know-how and expertise between managing directors in a protected space and help with the right impulses to transform companies sustainably - and make them ready for the future MORGEN for the future.
Jonas Reuter
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About us:
MORGEN is a specialized management consultancy that focuses on the development of new business models for medium-sized companies. In particular, it supports owner-managed companies in their future-proof transformation. Knowledge transfer is at the heart of its consulting activities, which is why the MORGEN Blog regularly publishes articles on key topics such as digitalization, transformation, customer centricity and sustainability.