Value Drivers in Revenue ManagementRevenue management

The term “value added” describes the enhancement a company gives its product or service before offering it to customers. It can be considered as special characteristics added to a product or service by a company or producer to increase the value of a product or service. Value added applies to instances when a firm takes a product that may be considered homogeneous, with few differences from that of a competitor, if any, and provides potential customers with a feature or add-on that gives it a greater perception of value. Ohno defines value or value added as everything the customer is willing to pay for a product or service (Ohno 1990). For instance, a company may add a brand name to a generic product or produce something in a way that no one has thought of before. Adding value to products and services is very important as it provides consumers with an incentive to make purchases, thus increasing a company’s revenues. Added value must be focused on products, services, images, characteristics, brands, processes and activities, which generate a certain value to the organization and enterprise. Value added must always be regarded from the customer viewpoint and is everything for which the customer is willing to pay for. It is important that value added is recognized and perceived as value by the client. Many studies have shown that we only add value to a product for less than 5–15 percent of the time, the rest of the time is wasted (Helmold and Terry 2016). Companies can identify and develop value drivers that make the products or services so unique and special (Helmold and Samara 2019). Value drivers serve as the impulse of the product or service to persuade the customer that there are superior features in the product or service to pay a higher price. When companies create or promote value drivers, it is important to consider the following aspects: