Through Updated August 10, 2021
Offering customers more than the product or service they buy, such as free support or training, allows you to add value to your product or service that a customer might not be able to get elsewhere . The concept of value-added selling helps companies that are unable to make a product that is significantly different from their competitors to differentiate themselves and, in some cases, offer more benefits without too much production cost.
The term “added value” means exactly what it implies: when a customer buys a product or service from you, they get an additional benefit. Adding value is not the same as offering a free product or a discount because the customer is getting something different from what they are buying or something they cannot buy.
For example, if you give a customer a free belt with the purchase of pants, that’s a direct giveaway. If you offer free touch-ups, that’s added value. If a personal trainer offers clients a free subscription to their newsletter, this is an added benefit that the client might not get elsewhere and for which the client pays nothing more. A common example of value-added selling is a software operating system that includes a free Internet browser, word processing software, and spreadsheets.
Adding continued value to what you sell can help you position yourself as an expert in your industry, thereby improving your brand, says Tom Reilly Training. For example, if you are selling software, you can give customers a free password for a chat room on your website to interact with other users, post a free newsletter with tips on how to use software to improve business operations, provide 24/7 toll-free number. technical support or offer one year warranty. This type of value-added strategy allows you to stand out from the competition if they offer similar products or services.
According to Penpoin, many companies rely on loyal customers to stay in business, and value-added selling can make customers “hang” on your product or service as they come to rely on your bonus benefits. For example, as customers rely on your free support, it becomes more difficult for them to let go of the knowledge they have gained about your product or service and how to use it, and start over with a new business. Customers or customers might also be more willing to buy from you if they know they’re not alone after the sale.
High priced items
A value-added business model improves your chances of selling a product or services that require a large investment. Even when potential customers know they will eventually have to buy from you or your competitor, they may postpone the purchase for fear of making the wrong purchase. The longer they delay, the more chances your competitor has of winning his contract. If you add value by offering free installation, onsite training, free or low cost technical support, and other value added benefits, you are more likely to sell an expensive item.