Below is the list of various value creation methods:
Data-Driven Value
Doing business online has complicated this chain significantly, though these essentials remain inviolable. At each step in the sales process, online businesses now have the opportunity to collect customer information, the analysis of which can yield entirely new avenues for value creation.
- Identification of customer attitudes, behaviors and preferences can lead to enhanced value creation in both the sales and after-sale links of the chain through personalized offerings and unique customer experiences.
- This same data can be used to boost value creation in the marketing phase, creating more tightly targeted campaigns that both save money and increase sales per view.
- Analysis of customer data can help your company develop new products and processes, as well as identify potentially untapped markets ripe for opening.
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Releasing Encysted Value
Aside from data analysis, doing business online has the potential to transform small or marginally profitable businesses into global powerhouses. The examples of this are numerous.
Hotwire.com took the travel agency concept— traditionally a brick and mortar establishment encysted within a local community— and released its trapped value to create a worldwide network. Ebay did the same thing with the concept of the flea market; Netflix with the local video store; Amazon with the bookshop, etc. Finding the encysted value in your industry and using the power of digital communication to release it is the modern equivalent of striking oil in your backyard.
You should always be looking for opportunities to expand on traditional business concepts in order to reach a wider customer base. Digital communication acts as a solvent to break down the geographical barriers that kept many businesses small for many years. If you are the first to apply it to an industry, you will be well positioned to capture already-established markets.
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Augmenting Experiential Value
The Association for Consumer Research has identified two distinct types of value that can be created by a business: Utilitarian and Experiential value. So far we’ve talked mainly about Utilitarian value, which includes pricing, service quality, time saving, selection quality and other tangibles.
The revolution in online business has understandably been focused primarily on these utilitarian variables: the internet is a great place to shop because it’s often cheaper, reduces the time spent shopping, and is relatively free of hassle. However, the experiential component, which once was at the center of sales, has taken a significant beating in the process.
Experiential value is defined as anything consisting of entertainment, visual appeal, escapism or interactivity. Where once the experiential value was created upon entering a storefront, it must now be created on a computer screen. The lag in experiential value in the online marketplace is quickly being made up for as bandwidth and processing power allow for more immersive experiences online.
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