It may sound like a paradox as far as traditional models go, but emphasizing the importance of value-added products is key in modern businesses. In this internet age of quick and easy access to buyers, maintaining customer engagement, support, and satisfaction is a tall order.
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It all begins with what the business can add to the purchasing experience and transaction. Value-added products go a long way in image-building and branding. Added touches, improved features, or a discounted price generate loyal customers who will overlook the basic offerings of the competition. Value-added means an improved customer perception of the product’s value.
It is crucial in the digital age to gain competitive advantage. Many businesses provide services like one-year support for repairs or product replacements, which often spell the difference for successful transactions in a highly discerning modern market.
Nowadays, it’s not so much what the product is, but what the product can provide to the customer. This is the important shift: understanding what buyers value, from the processing methods and environment-friendly packaging to the fast delivery of a company’s products.
Think of perceived value as paying more for an Adidas or Nike pair of shoes over other sneaker brands. Or opting for a more expensive BMW car because of the quality associated with the company’s vehicles. Pricing is determined based on what customers are perceived to value and are willing to pay for. All in all, value added is the refinement of a product with the customer fully in mind.
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Jon Queen is currently a part of Amatex Capital, a Ukraine-focused private equity firm that places emphasis on the sectors responsible for gas and oil production, agriculture, production of value-added products, retail, and commercial real estate. Jon has worked with two leading Kyiv-based investment banks as Managing Director and Head of International Sales. More on Jon and his work here.
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