Many businesses assume that the more cost savings they can pass on to their customer base, the more customers they will retain. Of course, there’s logic to this. If you can offer your service just as well as any other in your industry but offer it at three-quarters the price of competitive options, then you’re liable to gain some attention.

But it’s important to note that cost-cutting isn’t always that clear in terms of value achieved. To use a simple example – if a restaurant switches delicious fresh calamari for frozen calamari, and despite the savings passed on causes some controversy in the clientele who truly appreciated that prior dish, well, you’ll see that the cost saving wasn’t worth the reputational and operational knock.

For this reason, it’s important to identify what value is and how it works in your form before you assume it scales exactly with cost. Let’s considers some examples of when this doesn’t happen, why, and how to think about planning thanks to that effort:

Improving Responsible Outcomes

In today’s market, clients and customers are ever more aware of the ethical and environmental responsibilities companies have, and it’s important that your firm doesn’t exaggerate its impact or standards to do so. For that reason if your business is solely focused on price reductions at the expense of responsible practices, it can backfire.

For instance, maybe you’ve decided to source cheaper materials that don’t meet the same ethical standards as your previous supplier. While you might save on upfront costs to stay competitive, customers who care about sustainability or fair trade may start to feel uneasy about supporting your business and even make that known. There are independent investigators and watchdogs that can make this move hard to hide, and of course, hiding it in the first place shows there’s an obvious problem here. 

At best, this could lead to a loss of trust and loyalty, which are hard to rebuild once they’re broken.

Investing In Business Values

Customers really do care about the standards and business operational priorities of the businesses they buy products from. Does that go for every consumer and every business? Not entirely, after all we need only look to some of the questionable practices in the fast fashion industry to know that.

However, for a certain clientele, paying for appropriate and ethical standards is what they consider essential to the purchase. You can even sell this to your audience if you’re astute about it. Take customer service as an example – if you want to reduce staffing to save money this will show in terms of questionable automation and longer weight times. 

But if you imagine reinvesting in training programs that make your team even more effective first, then that might help you restructure your approach. It’s often a question of values and not just pure cold calculation, as outcomes can be achieved in various ways.

Integrating New, Better Standards

Often, customers are willing to accept the cost of an innovation that stands you apart or improves their operational capabilities. A company integrating renewable energy is a good example of that. 

Yes, installing solar panels or switching to electric delivery vehicles may involve an initial “outlay of capital”, but these investments aren’t just for cutting down on long-term operational costs—they’re also highly attractive to modern consumers who want to know that they’re making structural changes in their own lives too. 

More and more, people are making purchase decisions based on a company’s commitment to sustainability. But that’s just one example. For instance, a healthcare solutions platform that allows a company to better manage its patients and administrate their registration with a clinic or practice will feel more seamless and trustworthy to deal with, which can be something of a win-win approach if you explain your new approach in very simple, appropriate, necessary terms.

Understanding Clientele Expectations

Some clients aren’t looking for the perfect deal, they’re looking for more than that. We’re willing to bet that most people understand that in terms of raw, stat-for-stat specifications, Apple iPhones don’t beat certain Android phones. Does that mean they’re less of a value proposition to the audience who prefers that economy? Not at all.

It’s because of the design language, the economy that has been developed for years, the careful attention to seamless user experience that customers care about the brand and may continue to see it as their first choice. Understanding how you can curate your own approach to brand dedication like that, by perfecting what it is you do, can help you avoid necessarily justifying what you have by price alone. It’s a big element of course, but not the whole story.

With this advice, we hope you can more easily increase client value, but not solely as it relates to cost.