A value-added service or VAS is a type of non-core service or feature provided for free or little cost when a consumer purchases a product or service. Commonly used across the telecommunication industry, the concept has also been utilized in any industries or organizations involved in the business of rendering services.
In other words, a VAS is any add-on features or service inclusions to the primary product. As what the name implies, its general purpose is to add value to the core product and thus, add monetary benefit to the business. From the perspective of consumers, this value could mean increasing the usability, attractiveness, and cost-efficiency of the core product.
The specific goal of a value-added service is to promote the primary business or core product and attract consumers, thus serving as an example of sales promotion tactic, as well as to define further the unique selling proposition or differentiation of the business or its brand and product, thereby serving as a part of promotion in marketing. Note that the concept of value-added service can with after-sales services depending on its implementation.
Nevertheless, different organizations have different ways to add value to their core product. Consider the different examples of value-added services below.
Some Examples of Value-Added Service
1. Complementary Freebies
Complementary freebies collectively represent a prime example of value-added service. These free products or services complement the functionality or usability of the primary product. Including freebies not only allow the sales of these complements but also enhances the sales value of the primary product.
In the mobile telecommunication industry, examples of freebies included in certain voice and data plans are unlimited text messaging or free specified amount of data, free Internet access to specific websites or online-enabled app services such as streaming services, and online gaming, among others.
2. Auxiliary Services
Similar to freebies, supplementary or auxiliary services are non-core services provided by a business to promote the attractiveness of a core product, enhance its sales, and build customer relationship. However, unlike freebies in their general sense, these services are not standalone. The core product determines their value and functionality.
A prime example of an auxiliary service is the free delivery service provided by some restaurants or free shipping from electronic companies. Airlines include luggage check-in and onboard meals within their airfares. Companies such as Apple and Microsoft provide routine upgrades to their software such as the macOS and Microsoft Windows operating systems.
3. Customer Support
Another example of value-added service is customer support coursed through different mediums of communications such as phones, email, chat, and social media, or through in-store and on-site assistance. Customer support can include providing technical assistance, free maintenance and upgrades, and responding to inquiries or feedback, among others
Customers of mobile network and Internet service providers have free access to round-the-clock customer support via multiple mediums. The same is true for customers of banks and other financial institutions such as insurance providers, as well as buyers of consumer electronic products such as computers and smartphones.
4. Loyalty Program
A customer loyalty program is one of the notable examples of after-sales service. However, depending on implementation, it can also be a value-added service, particularly if the business includes additional services or features attached to their core products.
For example, some major credit cards providers, as well as private-label credit cards have additional privileges, often becoming available whenever customers use them to make a purchase or when they reach a certain purchase amount. These privileges may include redeemable points, discounts to selected stores and restaurants, and memberships, among others.
5. Employment Benefits
Although outside the realm of a producer-consumption transaction, employment benefits can also be considered as an example of value-added service. Take note that the relationship between an employer and employee is similar to that of a business and its consumer due to its transactional nature. Both relationships involve an exchange.
Nonetheless, common specific examples of employment benefits include healthcare insurance coverage, paid annual leaves, and retirement package. Other examples include profit sharing through actual monetary compensation or stocks option, access to auxiliary services of the company such as in-house clinic and gym, take-home vehicles, and loan services.
