Is it a surprise to know that 9 out 10 Business Success today compete solely based on customer experience and value creation they provide? Not really. Given the surge in consumer awareness worldwide and challenges such as climate change, income disparity, unchecked power of tech corporations, etc., people are now much more perceptive of businesses. Hence, being a value creatoris even more paramount today.
From the ground up, every business is purposefully built to serve and create value for its owner, employees and customers. The latter is probably the most important puzzle piece regarding business success and profitability. After all, no consumer would remain loyal to a business that does not offer anything to them.
So, how can business leaders and entrepreneurs adopt value-based leadershipand leverage value creation for sustainable business success? We cast a look in our blog.
Defining Value Creation
First things first: as a value creator leader, you should be completely aware of value creation.
Giving something useful in exchange for something more valuable to you is the definition of value creation. This is a broad term that includes both costs and benefits. While that may sound similar to profitability, businesses today have started impact investing, thus seeking more than just a return on their investment. Impact investment and B-corporations seek to maximise financial returns while also providing a public benefit. This is where you have the opportunity to emerge as the best business iconin the eyes of the customers, given how you prioritise maximising value for them.
A case in point can be some of India’s best financial leaders, such as Sanjiv Bajaj – the Chairman and MD of Bajaj Finserv and the President Designate of CII. Over the years, Bajaj Finserv has cemented itself as a legacy corporation that serves various aspirations of people. Sanjiv Bajaj took this a step further by doing three things:
1. He anticipated the needs of the consumers, especially in lower-tier cities of India, and analysed the supply-demand gaps in the financial services market.
2. He focused on building differentiation through innovation in unsaturated segments of the market rather than commoditisation of the mass-end of the market.
3. He focused on long-term vision rather than chasing short-term gains.
By adopting these strategies, Sanjiv Bajaj was able to lead the diversification of the Bajaj business and serve the growing financial needs of aspirational Indians through tech and reliable service. As a result, Bajaj Finserv is amongst the most respected and popular NBFCs in the country today, with a market cap of over $35 billion.
So, what lessons in value creation for business success can we take from the famous Indian businessman?
Value creation for customers – How to do it?
The first rule of value creation is that you only get value when you give it out. If you want to be a successful value creator, then you must:
- Figure out your goals and aspirations
- Develop your business’ primary purpose
- Align your business’ products, services, and vision around achieving the primary purpose
Balance value creation for all stakeholders
Here, it is important to avoid falling into the pitfalls of single-minded value creation. What that means is tilting your value creation either completely towards the customers or completely towards the owner. Doing so is a sure-shot recipe for business failure. Common examples include developing a niche, expensive product ahead of its time. Still, the customers see little value in it at present or selling your services at a very low price to attract customers but at the cost of profitability. Hence, balance is essential.
Imbibe values in your business culture
A value creator leader has a clear vision and roadmap to success and creating value. But that’s not all. Such a leader also ensures that the vision is expressed clearly in the organisation’s culture and people, thus leading to more efficient and purposeful decision-making, collaboration, and synergy. You can truly build a successful and well-respected business by motivating your employees and teams to deliver customer value.
Market and sell the benefits and not the product itself
Another obvious principle of value-based leadership is to focus on marketing what the consumer wants rather than the features of a product. The true value lies in promising and providing a specific experience to the customer that either solves a problem or innovates a new way of doing something. That is the true value that a customer seeks.
Don’t be a generalist
Many businesses fall into the trap of diversifying too much and chasing after multiple niches and products to please customers. That results in multiple less-than-satisfactory value creation instead of a single, highly-valued product. Hence, try to find your niche and a problem area and then specialise and innovate to offer true customer value.
Long-term value creation should take into account the customers first. Doing so would put the onus on customers to create value for the business, and if they are getting what they deserve, they would be more than happy to become loyal to the business in question. Figure out what the customers want, instil value creation ethics from top to bottom, streamline your company’s purpose and sell a memorable experience. There can’t be a better road to success and reputation for any business than this.
With mass awareness on the rise, consumers have become more intelligent, conscious, and demanding than ever before. This makes it incumbent for business leaders to move beyond just profitability and don the cap of a value creator to deliver purposeful solutions and services to the audience. The value a business creates in a customer’s life results in far more value earned back. Business icons like Sanjiv Bajaj have already shown how to do it through careful planning and sticking to certain principles. In this blog, you get to learn the secrets of creating value for customers and building sustainable success for your business.