If you think your product or service defines your value to customers, think again. Your value is what your customer believes it to be and nothing else. Even if you're selling the fastest, smartest, most efficient or effective, if you're not reinforcing what your customers value, or worse yet, you don't know why they keep buying from you, you're not selling value.

Of course, if they don't see your value they'll be more easily lured away by the competition, and that's expensive. According to the research of industries spanning financial services to retailing, it can cost five to ten times more to replace a customer than to retain one. The opportunity costs are enormous, too. According to Bain & Co., an international consultancy, a mere 5% increase in customer retention can increase a company's profitability by 75%.

What's so tragic is that you may already be giving customers the value they crave, but if they don't realize it, you may as well be doing nothing. Consider one of our clients, a Fortune 500 manufacturer. Their contracts promised regular, preventive maintenance, and they even guaranteed repairs would be made onsite within two hours. The manufacturer was highly conscientious in satisfying the contract, so, naturally, they thought they were satisfying their customers.

But here's the rub: the manufacturer's staff never told their customers when they had visited or what they did while there to service the account. They missed a critical opportunity to reinforce what the customer valued most: peace of mind. And peace of mind is what the manufacturer was delivering by regularly and promptly visiting sites to keep systems running smoothly. But the customers didn't know that and, consequently, didn't value the manufacturer nearly as much as they should have.

Don't let this happen to you.

Reliably providing your customers with the value they seek - and making them aware that you're doing so -- isn't necessarily easy, but it isn't complicated either. You have to:

• Understand what they value,
• Sell that value,
• Deliver it, and
• Reinforce it.

Understanding What Your Customers Value

Chances are, you have a strong grasp of the intrinsic value your product and services provide -- it's usually measured as payback in hard dollars, internal rate of return or net present value. However, what customers genuinely value may be more circumspect. So we strongly suggest that you follow the lead of another client of ours, a global commercial HVAC sales and service organization. Every six to nine months, their sales professionals do face-to-face interviews with key accounts. They ask 12 to 14 questions that unveil:

• Why their customers bought from them.
• How they're using and applying their solution.
• What they value most about their solution and their company.

These in-person relationship reviews are significantly more effective than written surveys, which may only elicit yes/no responses or, at most, a simple sentence or two. They approach their interviews like an investigation, listening carefully and asking clarifying questions.

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