Fair value is a simple concept but is often challenging to deliver in practice.
Fair value should be seen through the eyes of a customer. It involves an exchange between the customer, a company, and the marketplace. Fair value happens when a customer believes this to be fair for the services provided.
Delivering fair value
Delivering fair value ensures companies must supply products or services at the right quality and price. It also means that firms give customers enough details to decide on the best choice for their needs. These factors mean consumers can have confidence in their buying decisions.
Fair value also increases trust and consumer protection by driving good competition and market integrity.
Fair value matters when it comes to competition. A healthy marketplace has companies competing to supply the best value to customers. However, this can also involve new entrants entering and disrupting a market where fair value is not occurring.
Building competition also ensures market integrity. When this happens, customers can be more confident they are being treated fairly and safely. This aspect also means actions to manipulate the market unfairly are less likely to happen. Plus, a deliberate distortion of pricing is blocked.
Ensuring good governance
Wrapped around fair value is good governance. For example, close monitoring of products and services can show areas of consumer harm. Plus, benchmarking can reveal new ways to delight customers. When senior managers own this, it is more powerful.
Companies that place the customer at the heart of their business and supply fair value win more business. There are examples of this in lots of places. Also, fair value can result in lower costs by reducing complaints and wasted effort. All of this improves customer satisfaction, and the brand image gets better.
Bringing it all together
So, whilst fair value is a simple concept and often challenging to deliver, it can be done well and bring good results.
As a team of practitioners, we specialise in bringing fair value to life through the eyes of the customer, regulatory goals and commercial advantage. We bring all three aspects together to help firms win more. Simple.