What is value?
What is value? This is probably the question asked most often. It’s both a little strange and rather comforting to think that most of the companies we work with have such trouble defining value. It’s worrying because all companies exist to serve customers and create value. It’s comforting because it’s something that everyone seems to struggle with.
The struggle seems to centre on the different types of values that companies think about. Sometimes it’s revenue. Sometimes it’s market capitalisation. More and more today, however, it’s the value created for customers. This can be described by solving a specific customer problem. Or giving a customer some benefit they can’t get other ways. When defining value it is best to focus on the customer need first. This creates better connection with the customer and alignment across different teams. The other pieces like revenue and company valuation will come later.
Here are some ideas that might provoke how to define value for a customer. Does it help a customer:
- Save time?
- Save or make money?
- Be more social?
- Create a positive emotion or avoid a negative emotion?
- Make them better at achieving their goals?
- Stay healthy?
- Live a better life?
These are all roots of value for a customer. There are more, but these are enough to get some ideas going. Once you have these, you can ask yourself how much this is worth to provide.
Remember, there is also value in alignment, momentum, motivation and other intangible attributes if you’re working on internal initiatives where your users are your colleagues.
Create a picture for your team that describes the (different types of) value you are delivering.