Creating Value

As we enter the second month of 2009, many Americans are filled with a sense of total uncertainty. The very core of our society has been irrevocably changed, and yet it is difficult to predict where these changes will lead in the future. Despite the different status we all hold, the one thing we all have in common is the fact that change will continue.

As unemployment increases and more people find themselves without income, the dollar has become an even more valuable item for the average consumer to part with. What may have seemed like a reasonable purchase last year, may seem completely unnecessary right now.

So how do businesses continue to create value for their customers?

Very few organizations and industries are recession proof. However, there are basic necessities that most people will continue to purchase even when times are tight. For this reason, grocery stores, mass merchandisers like Target and Wal-Mart, drug stores, gas stations, and utility companies will continue to see consumer dollars.

But what about everyone else? How does the neighborhood restaurant, or the local florist shop survive when consumers don’t have the extra money to support them?

One way for these businesses to survive, is to continue to create value for their existing customers who can afford to spend discretionary income, and explore a new customer base. Value can really be subjective, as it is based entirely on perceptions of worthiness, importance, usefulness, and necessity. So the best thing for business owners to do is to use their experience as consumers as a guide, and ask themselves the following questions:

· Is my product or service considered a necessity, a luxury or somewhere in between?
· Is my product or service truly unique?
· Do customers really get what they pay for when purchasing my product or service?
· Would I honestly pay for my product or service in a recession?

If you can answer yes to most of these questions and you are truly being objective, then perhaps you have mastered the art of value creation. However, if you can honestly identify some valid reasons why a consumer would decide not to purchase your product or service during a recession, then you can create a plan to re-invent perceptions of value, and weather the storms that lie ahead.

by Keri Glover