B2Bridge

One of the aspects that increases the perceived value of an offering is the reduction of time and effort the offering provides to the customer. If your product or service saves the customer a lot of time, those savings are regarded as value in the eyes of the customer. If offering A saves more time than offering B, offering A is worth more than offering B in the eyes of the customer. So, as a supplier, you can ask a higher price for offering A -- or give the extra value away to the customer and obtain a more competitive market proposition.

Often, time savings can be converted into financial savings too. By multiplying estimated time savings with a precalculated man-hour rate, one obtains a clear (yet estimated) cost reduction. Providing management-level decision takers with these numbers, increases their perceived value of your offering. Often these numbers help visualize the real value of the original time savings, and clarify the impact of the time savings to the company's bottomline. This clarification underlines the validity of the time savings or even increases the perceived value on management level.

Not everyone regards these cost savings as valid information, though. First, the numbers are often based on assumptions of time savings and average man-hour rates. Not everyone will regard the hypothesis as representative for their situation. Second, user buyers will have more sympathy for the mere time savings. They do not need to convert time savings into cost savings, since they are looking for ways to reduce their own effort and increase the comfort of their daily tasks. That is why user buyers will perceive value in a different way. It is not the offering with most of the time savings that will get the highest value attributed to it. It is the offering that makes the potential customer beleive he or she will effectively be able to reduce time and effort when using it. The more credible and concrete the time savings are, the more value a user buyer will attribute to the offering.

And of course, that is one of the sources of conflict between user buyers and their management.