Providing more value Value can be defined as the importance, worth or benefit of something to someone. The ‘value’ of something is not a fixed commodity, for example, a barrel of water costs more than a barrel of oil in the Middle East. The importance of water and the life-giving benefits it provides places its ‘worth’ above oil in a region where oil is abundant and freshwater is not...
The Three Vectors of Value The three vectors of value can be classified as: Importance; Worth (Cost) and Benefit.
BY ANDY CROOK, GOTBOOST
Importance Having a roadworthy and reliable vehicle is of great importance to some customers, to others, it is simply a legal requirement, they are required by law to have an MOT certificate. Customers who recognise the ‘value’ of quality parts and the increased longevity offered by regular servicing above and beyond the minimum requirements of the service schedule will appreciate it may take a little longer to do the job right and will not focus solely on the cost.
BUSINESS
To start with, let’s think about how you perceive value in your own business. Consider your parts supplier, what do you value most about their service? Is it the price of the products, or the number of deliveries per day? If you had to choose between two suppliers what would add more value to your business? Price or the correct part supplied? ‘Value’ can be subjective if the job has no time pressure and the extra profit was worthwhile then the cost might sway your decision. But if the job could tie up a ramp for a day or two then getting the correct part might be of greater benefit.
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If this is true when you are a customer (as is the case when dealing with your parts suppliers) then it must also be true for your customers. However, it is not easy to identify which vector of value is most important to your customers, because it changes all the time.
Perceived value How do your customers perceive ‘value’ in the services you provide? Here are some examples for each of the value vectors.
Offering different levels of servicing caters to the importance placed on servicing and maintenance by your customers. I have seen this done several different ways, but Bronze, Silver and Gold standards offer customers an obvious choice in this regard.
Worth There is only room for one ‘cheapest garage’ in any town, so competing on price is never a great basis for adding value. There is always someone willing to do the job cheaper than you so leave them to it. Worth, in this case, may not be the cost, but the avoidance of unnecessary expenditure. Using air conditioning as an example (as the aircon season has started) just topping up the refrigerant in the system may cost less, but a full air con service that reveals a small leak which, once repaired, ensures the system continues working effectively, is a far better option. It may look more expensive, but it is cheaper in the long run.
