To maximise your business’s wealth-producing capacity, it is very important that you clearly and effectively create, deliver and capture value. Best practices can help your venture stay afloat, compete with big players in your niche and eventually achieve success. Here are some great tips that you can integrate into your organization to ensure value:
Create and sustain effective relationships with your customers.
Try to establish and maintain effective customer relationships, considering 3 critical variables, such as commitment, trust and empathy. By carefully managing such relationships, you can avert loss of sales, especially when there are price hikes, and will have more market power. Make sure you explain price hikes to your customers before implementing them to avoid unfavourable sales results and profit loss.
Consider price objectives and elasticity of demand when designing a pricing strategy.
Pricing objectives and elasticity are important elements that should be considered when creating value propositions. Along with customer data analytics and technologies that are used to manage and analyze customer data and interactions, these to aspects are essential tools for customer relationship management to enhance your relationships with customers and eventually build value. They help efficiently and effectively drive sales growth.
Capture value through persuasion and competition.
To create a strategic value proposition and pricing options, you should incorporate premium pricing that focuses on profitability and helps you maximise your profit margin. You should also look into a high turn-over rate that focuses on productivity and helps you maximise sales numbers and effectively uses available assets. Take note that when your marginal revenue is negative, you will not be able to maximise profit, as loss in revenues due to price effects would outweigh gains due to output effects.
All in all, your business can create value using the value chain process. Basically, you should disaggregate your business into strategically relevant activities to understand general costs patterns, and then you can create and capture value.