Companies often struggle with the critical but difficult task of quantifying the economic value their offering brings to their customers’ bottom line. The following is an excerpt from Stephan Liozu’s article “Value and Your Business”, which was originally published in the September 2012 edition of Smart Business, and provides practical steps for accomplishing measuring value.
Why is it that few suppliers in business markets are able to define and measure value?
In a 2008 survey of business executives, 79 percent attributed this difficulty to a lack of capabilities and skills needed to assess value, apply the appropriate methods, and extract the exact value differential between two product.
Second to the value-assessment issue, communicating value to the market was associated by 65 percent of the executives with difficulty in elevating the value message above the advertising noise in the market.
Bottom line: There is a need for more research related not only to theory on value but also to marketing tools for understanding, measuring and delivering value in business markets.
Scholars agree that there are six characteristics of business value that make value difficult to measure: value is 1) a subjective concept, 2) a trade-off between benefits and sacrifices, 3) multidimensional, 4) defined relative to competitors, 5)segment-specific and 6) future-oriented.