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In today’s post, Paul Azad, the founder of ServiceTree talks about value. What does it really mean? How do we measure it? And more importantly, how can we provide value to our customers?
When we’re talking about value, it’s generally seem too bad defined as one of those fuzzy terms that it’s not really something that we can measure, it’s not something that we can hold people accountable for and it’s one of the ary terms.
For somebody like myself, who likes to have goals in place and has to have things that are achievable, things that we can measure, a word like value, always made it hard for me to not only comprehend what people mean by it, but also when I’ve talked about it, it was one of those words that I used, but in the back of my mind, I always thought to myself, it’s one of those sort of fuzzy words, or somebody said, it’s a weasel word to move forward. But really, there is actually a simple way to measure value, and it’s, it’s a simple formula, value to me is experience divided by cost. What I mean by that is, like a math equation, experience is what we achieve, or what the result is, and we divided by cost.
What Is The Value Of A Car?
So I’m gonna use an example of a car. For a kid that’s out of college, the value of getting a car could be like a 20 year old Toyota Corolla, and they could spend like $2000-$3,000 on it. Now you sort of think to yourself – Man, that’s not a value, that’s two or $3,000, for a car is 20 years old.- But when you sort of use that formula, the value is experience. So for them, the experience is they get a freedom, they don’t have to depend on their parents to take him anywhere. They don’t have to worry about getting a rideshare or taxi or a cab back from the destination, it given that freedom. And the cost is say two or $3,000.
The Value Of A Luxury Car Is Different For Different People.
Now, sort of in the same breath, you can totally talk about a car, such as maybe a Lamborghini or Ferrari, and people go on why on earth would somebody buy a car that’s that expensive? I mean, there’s speed limits on the roads, so it’s not like you can drive everywhere to 300 kilometers an hour. It’s definitely something that you can drive a couple of 100 miles an hour depending on where you are in the world. So, why would somebody spend that much money? And some people will talk about it and sort of define that people that buy those luxury cars, or those supercars are vain people, but it’s not really that. If you look at the word value, and apply it to that it really works the same way. So in this example, the cost, what we’re going to be dividing by isn’t a couple of $1000, it’s $100,000. So if it’s a Porsche 911, you’re talking about maybe 120-140,000 US dollars. If it’s a McLaren or a Ferrari or a Lambo, you’re talking about $200,000 plus.
If you think about it, and if you go back to the school kid, or the kid that’s just out of college, and you think that’s gonna give them freedom, the top of the equation is freedom, the value of it is really, really not there. But for somebody that is successful, and somebody that has achieved that in their life to be able to afford that car, and not won money for it or not got the money deceitfully, a car like that is a status for them, It’s something that they’ve achieved and it gives them that feeling of achievement, it gives them a feeling of they’ve been there, they’ve got there. If you think about it those cars are not cars you see on the road very often. So it’s people that have either got it the right way, and they’ve worked hard for it. And then obviously, there’s going to be some people that have managed to get sort of to that level by being deceitful, and maybe some people have won money. But in real terms, the majority of the people that drove those kind of luxury cars are definitely going to be those that have achieved something in their life. So for them, the value is just as valuable as a teenager with a Corolla. So it’s really interesting when you sort of put that into concept, into perspective, and look at it from that sort of point of view.
With that all in mind, you can also apply that for anything, it could be a boat, could be a sandwich, some people sort of look at fast food and is it really worth it. And for somebody that’s going to spend a couple of dollars on a burger, and again, somebody that’s got a lot of money turn around and say – Well, that’s not a value to me- Because it might not be made up very good quality ingredients, it might be highly processed. So for them, they wouldn’t spend a couple of dollars on a fast food burger. But again, it’s all relative to the person. And so value is still something that has a different meaning to everybody.
How Do We Keep Our Customers Happy And Provide Value?
But when you sort of apply that formula to value, I actually think it makes it really easy to be able to communicate what value means. The point I’m trying to make with value is: Value and our customer, how do we actually keep our customers happy? And how do we provide value?
When I look at MSPs, and I sort of hear what they talk about, and what they do for their customer, they always try to talk about how they like to provide value to their customers, they do all this stuff, and the end result is valuable to our customer, and then you think about it, and that sounds all good, and again, nice, funky words. But, what does it actually really mean in terms? I definitely use that when I speak to our customers in my MSP and I use that to be able to offset the conversation when people have about price. I turn around and say – Listen, it might be cheaper, we might be more expensive with someone else. But do we provide the value that you’re after? – And that will make somebody think twice about what they’re talking about, because you could go to an MSP that’s going to be cheaper, and I’m pretty sure most people listening would say the same thing – Are they going to give you the same thing? And are they able to deliver the same level of service? – Again, service is another one of those fuzzier words, but more to the point is, if you’re able to provide value to your customer, and show them how you’re able to help their business, be better at doing whatever they’re doing, then that is valuable to them.
So I would sort of think about that before you have your next QBR with a customer look at being able to define to them, what is the value that you’ve provided over that period of time? How were you able to provide value? Was that because you were able to look at a problem before it happened? Was it because you were able to obtain hardware cheaper than another vendor? Or was it because you were able to help their business do something better, which therefore meant that that business themselves could be more valuable to their end customers. Sometimes you can sort of play it forward and help a customer help someone else and that really is a true way I personally believe of value.
What Is a Win-Win Partnership?
Something that relates to this is something that you’ve heard me sort of talk about before, and that’s the win-win. So back to the value and what that means, you can also use the value proposition of win-win. When I talk about win-win, I’m talking about that if I’m winning and you’re winning, we’re both happy, we’re both achieving our goals, and that’s really what a true partnership is.
Unfortunately. there’s some times that you’ll see businesses they’ll be in a win-lose or lose-win scenario. It’s only going to be if the other organization is power hungry, or you might be that power hungry business and you’re thinking – Well, I just want to make every cent out of this business, or I just want to get my way. – You’ve got to actually be very careful with that because most times what you don’t realize it’s actually a win-lose. And for anyone who doesn’t know it a win-lose is really a lose-lose, you just don’t know it. If it’s a win win, and you’re both winning, then it’s a true partnership, mutual success is what the definition of a partnership is, and a win-win is all about that.
But unfortunately, quite often you’ll see a win-lose relationship where you’re winning and the customers losing, either because you’re charging more than you should be, you’re under delivering what you should be delivering on. Now you’ve got to understand that you’ve already lost, you just don’t realize it; that customer has more than likely already looked at other options, and is going to be looking elsewhere. The problem with that is when it’s a win-lose and as I mentioned that is really a lose-lose, it’s not easy to turn that around. I’m not saying that it’s lying but it is similar in effect to somebody that lies. As soon as you’ve realized somebody’s lied to you, you’re going to second guess or double guess, or triple think whatever they’re going to say if it’s true or not. So be very mindful about the wind-win and how it delivers it.
Again, this is a perfect example, that it’s not only in the business world. It could be a husband and wife, it could be a parent and a child. If you’re a husband and wife and say, for example, the husband is out and about the whole time on the weekend, and every Friday night out with the boys with drinking, then the wifei be at home saying it’s okay, it’s fine, he’s out with the boys, but you’re gonna understand, you might be winning, and she might be losing. Now sooner or later, that’s going to end up becoming a lose-lose, because you’re going to end up losing when she is disengaged from the relationship.
Same thing with a parent and the child or even friends, just mates. If it’s not a win-win, it’s a lose-lose, you just don’t realize it. So just keep that all in mind. It all comes back down to value, so experienced, affordable cost is value. The win-win is about delivering the right value to your customer, and how we can do it and how we can ensure our customers are happy with our services is really, really critical. To have longevity with your customers, have that long term relationship and ensure you’re around for them and they’re around for you.