1. IDENTIFYING VALUE

You are here in your Lean journey:

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If you’re reading this guide right now, you probably don’t have a plumbing situation going on. Your sink faucet is working as it should and your kitchen is probably dry. So you wouldn’t pay a plumber. You don’t need one. A plumber won’t make your life any better at this moment. It’s not worth your money.

Now imagine that tomorrow you wake up and your whole kitchen is flooded because some pipe burst overnight. In this situation a plumber would come in hand, right? That’s because they would solve a problem. They would give you a benefit. They would make your life easier. And that is value.

VALUE: everything your customer is willing to pay for.

HERE ARE SOME VALUE EXAMPLES

  • An insurance plan: you pay for the tranquility of knowing that if anything happens to your office or equipment, you are covered
  • A consulting firm: you pay for the time you save by learning from people who already know the subject instead of trying to find out all the answers by yourself
  • A CRM software: you pay for the facility of having all of your prospects and clients information and interactions stored in the same database

By the way, when we talk about customers in Lean, they can be either the final customer – a person or a company – or even an internal customer, like a coworker with internal demands. Meaning: anyone who needs you to generate value.

For example: in a marketing agency, the value delivered to the clients is the visibility and the revenue they get. But for the agency to deliver its value, it will need the support of a designer. Therefore, this designer will not deliver value directly to the agency’s customer, but to the agency itself.

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HOW VALUABLE IS YOUR VALUE?

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Back in 1993, Apple launched its first tablet. It was called Newton and it had some nice features, like creating notes and storing contacts and dates. But it was a flop.

Why? Because people didn’t see value in it. At least not at that time. So Newton was discontinued soon after, in 1998. As we know, some years later the iPhone and the iPad came out and were a huge hit.

Why? Because now there was perceivable value. People were willing to pay for that and the timing was now right.

The first step in your Lean journey is to get a clear understanding of what value you deliver to your customers and if they are willing to pay for it right now.

Stop for a few minutes and try to answer these questions:

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Before you go on: important things to remember on identifying value

  • Value is what the customer is willing to give you their money for. Make sure you know what yours is!
  • Sometimes the value is clear to you, but not to the customer. It may be because they’re not seeing it, or because it’s just not valuable to them.
  • Make sure your timing is also right. Do people crave for what you are delivering now?

“If you are sure that you are delivering value that people crave for and will give you their dollar bills for, congratulations! You can now start mapping you stream value.”