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News, tips, and advice for small business owners
The Basics of Value-Added Marketing
When you’re in the process of starting a small business it’s important to analyze the market you are in and keep your prices competitive, while still allowing you to bring in a profit. This brings us to value-added marketing. Value-added marketing is tricky, and knowing how to do it well can make or break a company, no matter what type of business they’re in. However, the key to justifying a company’s prices lies not in the product or service itself but by developing a marketing strategy that outlines what you can bring to your customers through that service.
Value-Added Marketing 101
Simply put, value-added marketing refers to the enhancement brought to a product or service by the service provider. Basically, what makes the service better than the alternative and therefore worth the buyer’s money. Sometimes value-added is as simple as putting a brand-name on something. For example, Nike is able to sell products at a higher cost than their competitors just by sewing a swoosh into their clothing and shoes, because customers know that swoosh comes with a certain level of quality and assurance that they’ve done their research on what makes athletic wear exceptional.
Depending on the industry you’re in, value-added could look entirely different.
A great example of this is the story of WaG Premier Grooming Salon and Day Spa operated by SurePayroll client Maria Erna. Erna began her business because she was looking to fill a need for a quality dog grooming experience. She had been burned by big-box chains and wanted to offer a better experience for her furry clientele. Her grooming services are designed for ultimate comfort and she wants to provide a soothing grooming experience for the dogs. Some dogs are traumatized by previous grooming mishaps, so it’s her goal to fix that. She uses bathtubs that aren’t as overwhelming to the animals and opts for high-quality products for healthy and clean fur. While her services are pricier, her clients can rest easy knowing that their pets are taken care of and experience a top-notch grooming experience.
Sell Others on Your Story
Every company has a story about why they got into business, what motivates them to do better, and what makes the business special. Marketing your service, at its core, is really just about telling your company’s story, and the better you paint the picture for your clients, the more they may be willing to buy into it. Think about every brand that sticks with you: what do they have in common? Notable brands like Toms shoes are well known not just for their unique style of shoes, but because for every pair bought, they donate a pair to someone in need. By defining what makes your business unique and special to you, you’re more likely to draw in people that have the same motivations and experiences. Demographics can also be a selling factor. For example, just by saying that you are a woman- or minority-owned small business may be the kind of information that draws someone in who may have otherwise passed your website by. Stories stick out to people, and those memorable facts make it easy for customers to remember your business and share it with friends and family.
A great example of storytelling comes from I Have a Bean owner, Pete Leonard. Leonard operates a coffee roasting business and café in Wheaton, IL. There are several aspects of his business that offer value-added and a great story. First, Leonard is very open about the fact that he employes post-prison individuals. He also offers information on the website that he provides an elevated coffee experience by using organically grown, fairly-traded coffee beans in his facility. Plus, when you throw in the fact that orders get overnighted, and each bag is personalized, it makes an overall great story that customers love to share.
Leverage Your Experience
Chances are, if you’re specializing in a particular field, you’re bringing some pretty extensive experience to it. When marketing your services and selecting your prices, make sure you’re highlighting that experience and demonstrating to your customers what your tenure can offer to them if they’re to give you their patronage. This is not the time to be modest! If you’ve gone above and beyond with additional certifications or training, make sure that you’re spelling out the benefits that will transfer to the buyer. This is especially true if you specialize in a niche segment of your industry. If you’re a restauranteur, that could mean highlighting the culinary school you attended or your relationships with local farmers. For those providing legal or financial services, this could be courses you’ve taken or associations you’ve been a part of. Everyone’s experience is different, and you never know who you’ll speak to by showing off yours.
Show Off Your Track Record
When comparison shopping, savvy consumers are undoubtedly going to analyze results across varying brands. Costing more isn’t a bad thing if you’re getting more value for that cost. To build off the example of an accounting firm, remember that quantifiable success stories stand out.“By bundling services with my firm, my clients save an average of 11% on their accounting services” is information that will stand out more than some vague comments. Most likely, your customers are eager to spend money on something they see as valuable and quantifiable, rather than something they’re unable to analyze the results of. Word of mouth is huge to small business success, which is why when possible, you should be showcasing positive reviews that customers leave. While it’s great you can back up your work, potential customers are going to want to hear from people who have worked with you, or purchased your products in the past. Kicking off a referral program with loyal customers can also have a huge impact and be another way to attract new consumers to your business.
Treat Each Client Like an Individual
You know that your company is unique, whether it be in the products you sell or the services you provide. Providing a value-added experience to your customers also means recognizing that each individual buyer is different, has different needs or expectations, or has different viewpoints on issues. Treating customers as individuals is Marketing 101: email nurtures are more likely to be read when they include recipients’ name in the subject line and including a personalized note in a package almost always gets a smile. Little things like this are easy ways to show your customers you recognize them as a person, not just a consumer.
Customers also expect to pay a premium for a particular level of quality and customer service. Let’s face it, we expect a different level of service from a 5-star restaurant than we do from a McDonald's drive-through, and we expect to pay more for that 5-star treatment. It’s easier to customize a meal due to allergies and dietary preferences at the fancy restaurant than it is at a fast-food chain and sometimes that extra step of personalization and customization can make or break it for consumers. Doing what you can to exceed customer expectations will only help your business boom, and that starts by treating each and every person that walks through the door like an individual. By striving to improve customer experience, a business owner is more likely to see a higher return. In turn, good customer experience will increase the likelihood that your patrons will engage in ‘word of mouth marketing’ and refer their friends to you.
Whether you’re just starting your small business or you’re looking to expand, growth should always be on any small business owner’s mind. The fact is, you likely got into your business because you felt that you had something valuable you could offer clients in a way that no one else could, and that should be celebrated. While value-added marketing may seem like a silly buzzword, what it comes down to is providing great customer experience and resonating with your clients in a way that no one else can.
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