Read previous article in this series:

How to Build Superior Value Proposition – Part 1: The Basics of Superior Value Proposition
How to Build Superior Value Proposition – Part 2: Steps to Build Superior Value Proposition
How to Build Superior Value Proposition – Part 3: Spreading The Word – Proposition Part

Let’s take quick review of what we have done previously.

First, we build superior value that makes us different from our competitors. After that we spread our superior value to our current customers and our potential customers. Now, they know that we are better from our competitors. When our current customers know that we have real superior value, they are willing to pay more for our products and services. This is because our products, services and our business distribute more value for them.

Let’s break down possible benefits that we can experience from our superior value:

Increasing Prices

One of the biggest benefits is that we can increase our prices and not lose current customers with that. If our current customers believe that our products or services are valuable for the money that they will spend, then this is expected. But, we cannot start with increasing of 50% or 100%. This increasing will be small, for example, from 5% to 10%. With increasing our prices and without losing current customers we will have larger profit margin and larger profit for us.

Let’s see some examples. If our current selling is 1,000.00 pieces of our product with the price of $100.00, we will have income $100,000.00. Our current profit margin is 10% then the profit will be $10,000.00. However, after our improvement in our creation of superior value we increase our price for 5%, and now we sell the products for $105.00. This is small increasing in price, and with the same sales volume we will have $105,000.00 income and profit of $15,000.00. As you can see we increase our profit for 50% with increasing the prices for only 5%. This is butterfly effect.

Increasing Average Sales

Second benefit that we can receive from our superior value is increasing average sale from one customer. It is important for every business one customer to spend more money in one period of time. This means that they repeat their buying from our business and that is a prove we distribute real value for them.

Let’s continue with our example. Now, we increase the average sales from one customer for only 5%. Previously, we have 500 customers that spend $200.00 for $100,000.00 income. Now with 5% increasing of average sale, they will spend $210.00 and our income will be $105,000.00. This will bring us $15,000.00 in profit that present 50% increasing in profit with only 5% increasing in the average sales.

But, what is more important is that this second benefit is added to the previous – Increasing prices. With this increasing, we sell 1050 pieces of our product with increased price of $105.00 that means $110,250.00 income. Now, our profit is $20,250.00.

Increasing Number of Potential Customers

Third benefit from building superior value for our business is that we will receive increased number of potential customers. More people will hear about our value and will become our potential customers. This is big business potential energy for our business. Potential customers are the customers that can be real customers when they start to buy from our business. If we have more potential customers, we can expect to increase the number of our current customers that already buy from us.

But, for the real benefits of this third benefit we must convert these potential customers into real customers – buyers. This is a fourth benefit.

Increasing Conversation Rate

As a fourth benefit of our superior value is increased conversion rate from potential customers into real customers – buyers. Our superior value will convert more potential customers into buyers. Real message that they will receive about our value will build desire for buying into them. Because of that, probability of their conversion will be much greater.

Let’s continue with our example. If we reach 1,000.00 potential customers in the analyzed period of time with a conversion rate of 2% that will mean additional 20 customers for our business in that period of time. Let’s say that our superior value improves the number of potential customers for 5% and also improves a conversion rate for 5%. Now, we will have 1,050.00 potential customers with a conversion rate of 2.1%. These are additional 22 customers in an analyzed period.

But, what is more important is that this cycle of adding new customers will increase from period of time to period of time. For example, next period of time we will have 24 additional customers and so on. This is exponential growth of our customer base and with other benefits we will have great results for our business.

The numbers in the examples were given only as an example. They can vary and in the reality, they are different for all benefits. These are benefits that we can have some tangible results. However, also there are benefits that we cannot see results into the form of money. The most important benefit from superior value is increased business potential energy that makes all other benefits to become real.