Understanding what your customers really value can help you to market your products and services more effectively.
Customer value is the perception of what a product or service is worth to the customer. Customers don’t buy features – they buy benefits. Your customers will buy your product or service because of the benefits that they get. If you take the time to understand what your customers value and what they are willing to pay for, you will be able to market your business more effectively. You may also be able to win new customers from your competitors.
Most businesses make the mistake of thinking about value purely in terms of money. They create special offers to promote their products and services, but all they are doing is cutting their profit margin in a race to the bottom. Sure, there is a place in most markets for a lowest priced competitor but this doesn’t work for everyone. Take the airline industry – there isn’t room for more than a handful of low cost airlines and that is why many of them are in financial difficulty – their costs have gone up, but there is downward pressure on pricing.
Value is about much more than just money. Put yourself in your customer’s shoes – your customers think of value in terms of goals, benefits and results. They are seeking an outcome and this is what drives their purchasing decision. For example, an accountant might save a customer £6,000 on their tax bill and charges the customer £2,000 for doing the tax work. The monetary value to the customer is therefore £4,000. But what if this is only the beginning? What if the customer wants to grow their business over the next 5 years. The accountant could add value by providing advisory services to the customer over the next 5 years, to help them to achieve that goal. The customer would be willing to pay for that additional service because it helps them to achieve their goal.
The overall perception of value is, from a customer’s perspective, also influenced by experience. If the accountant in our example is difficult to deal with and the customer has to regularly drive to their offices to sign paperwork, have face to face meetings, etc. the customer will not think that the service is great and may question whether it is worth the money. Conversely, if the accountant offers meetings over Skype, at a time convenient for the customer and provides documents by email with e-signature capability, the customer may value the convenience and efficient service to the extent that they may even be willing to pay more for that service.
Amazon.com is a great example. The high street is struggling yet the world’s largest online retailer continues to grow. Why? Because its customers value the convenience, the vast range of product choices on offer and the ease of purchasing. Amazon has aligned its business model with the values of its customers and that is why it continues to succeed.
Join us at the 135th Lincolnshire Show on Wednesday 19th and Thursday 20th June 2019
Ringside Fifth Avenue, Lincolnshire showground, Grange-de-Lings, Lincoln, LN2 2NA
On Wednesday 19th June – we invite you to our Lincoln City FC talk at 10.30am – you can learn from the Lincoln City team what it takes behind the scenes to set the right conditions for success and some of the challenges that comes with it.
At 2.30pm on Wednesday – take a mid-afternoon break and soak up the show atmosphere with a Lincoln City inspired glass of something at our mid-afternoon drink’s reception.
Our team will be there on both days and we look forward to welcoming you into our marquee at any time.
RSVP to Linda e:mail firstname.lastname@example.org
We look forward to seeing you there!
A senior accountant at Nicholsons Chartered Accountants has taken retirement after working there for nearly 49 years. Richard Peet joined Nicholsons on the 27 July 1970 as a junior audit clerk and is the longest-servicing employee at the firm.
With his days at Sincil Bank Secondary Modern school coming to an end, Richard hadn’t made up his mind what he wanted to do, and after attending a couple of interviews for various jobs he was offered a position at Nicholsons. Richard joined the audit team under the watchful eye of the then partner David Hibbs. Although he enjoyed his work, he wanted to develop his expertise and took on some general accountancy work with a tendency towards agriculture.
Richard took an interest in farming following his time working on a farm during his school holidays. Over the years he has specialised within this area and was a well-respected member of the Nicholsons agricultural team.
Director and head of the agricultural team Richard Grayson commented “Richard has been a valued member of our team and I know that his knowledge and expertise has been appreciated by his clients. We would like to thank Richard for his efforts which have played a big part within the firm and we wish him well in his retirement.”
Richard has seen many changes over the years and none so much as the people he has worked with. In 2004 the firm moved from Newland in the city centre to their current location at The Point on Weaver Road. This was a bonus for Richard as it was nearer to his home! He also appreciated the introduction of flexi-time which was introduced by the firm 2003.
Richard says “I am very happy to have been with the firm for so long and am grateful to my colleagues for their good wishes and support. I have enjoyed working with our clients in the farming sector and have built up some great relationships with people over the years”
Getting a work life balance has always been a priority for Richard throughout his working career. In 2012 he went down to working 4 days a week and then in 2017 he dropped down to 3 days a week.
Now that Richard has taken full retirement, he is looking forward to spending more time gardening and fishing. Richard enjoys playing badminton and has played for the last 35 years. He is also a very keen Lincoln City Supporter.
This new charge will apply to certain loans to directors and employees that are still outstanding at 5 April 2019 and new arrangements put in place after that date.
The charge affects arrangements involving loans made via Employee Benefit Trusts (EBTs) and similar disguised remuneration schemes adjudged by HMRC and the courts to be tax avoidance and liable to PAYE and National Insurance Contributions.
There are new reporting and payment obligations that come into force for employers using such schemes from 5 April 2019, where the employer does not pay the tax and national insurance the liability can be passed to the individual who benefited from the loan.
Where the individual concerned had taxable income in the 2018/19 tax year of less than £50,000 they will be able to repay the liability over 5 years, and spread over 7 years if their 2018/19 taxable income of less than £30,000.
In the Autumn Budget the Chancellor announced that the “off payroll” workers rules that currently apply in the public sector would be rolled out to the private sector in 2020. The government have now issued a consultation paper that sets out proposed tax and national insurance changes that will impact on those supplying their services through personal service companies.
End users will be required to determine whether the rules apply to the services provided by the worker via his or her personal service company. This will be a significant additional administrative burden on the large and medium-sized businesses who will be required to operate the new rules. The current CEST (Check Employment Status for Tax) online tool would be improved before the proposed start date.
No change for “Small” Employers
“Small” businesses will be outside of the new obligations and services supplied to such organisations will continue to be dealt with under the current IR35 rules with the worker and his or her personal service company effectively self-assessing whether the rules apply to that particular engagement.
The definition of “small” has been widely awaited and the Government have confirmed that it intends to use the existing Companies Act 2006 definition. That is where the business satisfies 2 or more of the following features:
- Annual turnover of £10.2 million or less
- Balance Sheet total of £5.1 million or less
- 50 employees or less
The new obligations to determine whether the rules apply, deduct tax and national insurance, and report payments under RTI will apply to the agency or intermediary making payments to the personal service company where the end user is large or medium-sized. There will be an obligation to pass details of the status determination up and down the labour supply chain.
The liability for tax and national insurance will be the responsibility of the entity paying the personal service company, however if HMRC are unable to collect the tax from that entity the liability will pass up the labour supply chain thus encouraging those entities further up the supply chain to carry out due diligence to police compliance.
Please contact us if you would like to discuss how the proposed changes are likely to impact on your business.
As already announced, the personal allowance and the higher rate tax threshold increased on 6 April 2019. The personal allowance went up to £12,500 and the basic rate band to £37,500, which means that for most taxpayers the higher rate tax threshold is now £50,000. These thresholds were due to come into effect from 6 April 2020 but the Chancellor announced that the start date would be brought forward by one year.
Note that the limits will then remain the same for 2020/21.
Fifty employees from Nicholsons were asked to nominate a Charity of the Year and then cast their votes. In a closely contested internal poll St Barnabas Hospice came out top. The charities nominated are often charities that staff, their families or someone they know have been involved with.
Gail Paton, a Director at Nicholsons, says
“We feel it is important for staff to have a say, and by asking for nominations gives everyone the chance to put their favoured charity forward This year we are looking forward to working in partnership with St Barnabas Hospice and to raise money to help them maintain this vital service across Lincolnshire. I have personally benefitted from the services offered by this charity and fully support our choice this year.”
Corporate Fundraiser for St Barnabas Hospice, Caroline Swindin says
“Fundraising is so rewarding, but it is also lots of fun and great for staff moral and brand awareness. I am really looking forward to seeing the team at Nicholsons’ do various fundraising. They have committed to dress down days, quiz nights and cake baking.
St Barnabas Hospice is a local independent charity that supports more than 10,500 people across Lincolnshire affected by life-limiting or terminal conditions. Not only do they offer high quality, compassionate end-of-life care and support to patients, but support to their families and carers too. Without support from Corporate Sponsors, such as Nicholsons the Hospice simply would not be able to do the work to the standard and capacity they do.