What Customers Truly Value? 30 Elements (Bain)


 
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What Customers Truly Value? 30 Elements (Bain)
Chloe Xu, Other, Australia

Marketers have generally spent much time and effort on the pricing side of the value equation (marketing mix), because it is the easier part. Given the psychological complexity and analytical difficulty, few studies have been done to understand what customers truly value, allowing companies to improve the value proposition of their brands / products.

Almquist, Senior and Bloch (2016) identified 30 ‘elements of value’ in 4 categories of customers' needs – functional, emotional, life changing, and social impact. These comprise the universal building blocks of value that customers normally appreciate. The survey conducted by the research team indicated that offering certain optimal combinations of value elements improve customer loyalty and as a result revenue growth and company performance.


Interestingly, the research also found three patterns of value creation worth of special notice:
  • SOME ELEMENTS MATTER MORE THAN OTHERS. Perceived quality is the king, and no other elements can make up for a significant shortfall on it. The critical elements after this vary from industry to industry.
  • DIGITAL FIRMS ARE PERCEIVED AS OFFERING MORE VALUE, excelling on elements of "Saves time" and "Avoid hassles".
  • MULTICHANNEL BUSINESSES STILL WIN ON CERTAIN ELEMENTS, such as some emotional and life changing elements. Combining online and physical channels (Bricks and Clicks) is proving to be more powerful than either one alone.
The 30 elements can help companies to identify new value to offer, and to refine their product design, delivering more elements. Also they can help identify where customers perceive the company’s strengths and weaknesses.

To allow the above, creating customer value needs to be put as a priority on the agenda of company leaders and it has to be regarded as a key discipline in certain areas like product development, pricing, and customer segmentation. Also there should be someone in the company to explicitly think about, manage, and monitor value.

Source: Almquist, E., Senior, J. and Bloch, N. (2016). The Elements of Value: Measuring and Delivering What Consumers Really Want. Harvard Business Review, 94 (September), pp.47-53.
 

 
Customer Value | Consumer Value
Jaap de Jonge, Editor, Netherlands
Thanks for sharing. I agree that customer or consumer value, sometimes also referred to as "customer utility" or "buyer utility", is more important in strategic marketing than price. For some reason, in everyday marketing we sometimes tend to forget this and we over-focus on price.
The 30 elements of consumer value are a handy checklist to find potential new values to offer.
 

 
Customer/Consumer Value and Service
S. Lago, Business Consultant, Canada
An often forgotten aspect of customer value is customer service. Studies have been done which repeatedly show that happy employees make for happy customers and increased customer satisfaction. Fostering a company culture that makes happy employees does not need to be expensive and can create long lasting positive impacts to the bottom line.
 

 
What is (Customer) Value and Why is it So Important?
Marcel Wiedenbrugge, Consultant, Netherlands
In our book "Customer Profit Hacking" we describe customer value in terms of productivity, which is based on the value of the customer (in short customer profitability - supplier point of view) and the value for the customer (in short customer satisfaction - customer point of view). Quote:
"Customer relationships are defined by value perceptions of the customer and by value perceptions of the supplier. Together these value perceptions, meaning the value for the customer and the value of the customer, determine the productivity of each customer relationship."
Productive relationships are a prerequisite for sustainable and profitable relationships. As customers are the primary source of income, the focus on optimizing customer value is the only (obvious) choice.
 

 
Some Critical Remarks on the 30 Elements
Norman Dragt, Other, Netherlands
I do wonder how they made this distinction between the 30 elements and how it is possible to create a pyramid when at the same time stating that some elements matter more than others.
For example, I would order most life changing values under emotional values. To me an heirloom is not much different from nostalgia or is connected to reduced anxiety, as most people use an heirloom to remember someone who passed away who gave them good feelings.
Next to that I would think there are multiple cross connections between the different elements, for example saving time is often also a rewarding feeling.
This does not mean that I think the idea of value for customers is wrong, but that it needs a lot more deconstruction and research, before it can be used in marketing.
Also if you look at S. Lago's remark that studies have shown that employee happiness creates happy customers, something that does not seem to be part of the research by Almquist, Senior and Bloom.
 

 
It's Silly to Go After all 30
Donny Le, Entrepreneur, United States
It turns out that by scoring high on MOST of those elements DOES equate to higher profits, although it's silly to go after all 30. Apple scored strongly in 11 elements while Amazon in 8.
Another important aspect is focusing on a certain category and delivering exceptional value there. What this means for small businesses is they would do well to identify how they want to stand out from the crowd and investing heavily in their unique value proposition.
I recommend reading the full article if you're interested to learn more.
 

 
Customer Value? Start with your Employees!
CLAUDIUS RWODZI, HR Consultant, Zimbabwe
I tend to agree with @S. Lago on promoting a culture of making employees happy in the organization in order that the employees will be able to give value to the customers. It's important that employees be sincerely regarded as the most valuable assets of the organization for they can make or break the organization through their perception of the customer. If the organization gives superior value to their employees surely they inculcate a sense of appreciation in the minds of their workers which can be passed on to the customer. The bottom line is that it should all start with the worker as an internal customer then finally to the external customer. They say you can only give what you have. So it is prudent to extend our value system to the worker first and foremost so that our customer enjoy the same from our employees.
 

 
Negative Customer Value
Norman Dragt, Other, Netherlands
As this is just hear say, so I am not sure, but Steve Jobs seemed to work with a negative value namely: how little dislike does a product produce? He probably also looked at: How much do I like the product? But looking at minimizing the amount of dislike a customer experiences, does create a strong customer base it seems.
And you could say he was right, because what do most people dislike: the hassle of learning a new system.
And what other aspect of products do most people dislike: missing a product they use daily.
Of course it is a negative view of humanity, but it seemed to help Steve Jobs assertain the value of product as the iPod en iPhone and see them become successful.
 

 
 

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