What Do Customers Actually Value?
Updated: Nov 18, 2021
Do you ever wonder why you love a certain brand? Is it because it’s useful, makes you feel important, helps you achieve a goal, or makes the world a better place? Or is it hard to know why exactly you love the brand? Many of us think we know why we like a brand, but we actually don’t know the deeper reason why. Sometimes we honestly have no idea why we spend money over and over again on the same thing.
Imagine a forty-year-old man named Ken who lives in Yokohama, Japan. Every Saturday morning, he walks into Starbucks and is pleasantly struck by the strong coffee aroma swirling in the air and feels strangely excited by the loud grinding of coffee beans and friendly chatter of the weekend customers. His usual barista greets him by name, remembers his usual (usual order), and asks him how his day is going. As Ken finds a seat, he nods to a couple of other Saturday regulars (regular customers) and even chats a bit with a few people he knows. Sipping his steaming café latte, Ken soaks up the soft, yellow light that illuminates (lights up) the elegant coffee-themed art on the walls.
After a long week, Ken finally has time to read a book in peace. Even though it’s crowded on Saturday mornings, Ken doesn’t mind. In fact, the bustling (busy, crowded) dance of people and sounds somehow energizes him. And there’s just something pleasant about many of the customers who seem friendly, sophisticated, and artsy.
Truth be told, Ken doesn’t return week after week for the coffee. No, he returns for something much deeper and more valuable. But he can’t quite put his finger on it (identify it).
Most of us can relate with Ken in some way regarding a brand experience (product or service) that we love. Sometimes we can articulate (express) why we love it, and other times we can’t. Still, other times we think we know the reason why we buy something, but we’re actually dead (completely) wrong.
Understanding why you love certain brands will not only help you in your business – it will also help you understand your personal purchasing habits more clearly. And if so much of your life involves doing some sort of business and also personally purchasing products and services, it’s worth taking the time to think about the deeper incentive – the deeper motivation.
The Elements of Value Pyramid
Bain and Company created a framework called The Elements of Value Pyramid (see image below) where consumer purchasing motivations are broken down into four basic categories: functional, emotional, life changing, and social impact. The four categories consist of a total of 30 specific values that a product or service provide for the customer.
This pyramid can be viewed similarly to Maslow’s hierarchy of needs. We have the basic, more quantifiable (measurable) needs at the bottom, and more complex, qualitative (measured by quality) needs at the top. As we explore The Elements of Value Pyramid, we can see a similar model, but it’s focused specifically on the needs, or values of the consumer – the customer.
At the base of the pyramid are the functional elements that customers value. The second section moving up are the emotional elements that motivate customers. Nearing the top in the third section are life changing elements. Finally, at the very top of the pyramid we have self-transcendence, or moving beyond one’s self to be part of something greater.
Application for businesses
In business, we can keep this framework in mind as we think about how to add value to our product or service in order to deeply satisfy our customers.
According to Bain & Company’s research, scoring high on at least four of the 30 elements is important to ensure customer satisfaction and growth. Of course, more is always better.
Apple scored 11 out of 30, which suggests that probably no company needs to score much more than 10 out of 30 in order to have some type of success. Amazon had a great score of 8, but then added its Prime service, which increased its overall value and reach.
Whatever our industry is, we should acknowledge that we need to differentiate from our competition in some way. Look at the value pyramid and find a specific area you can focus on in order to make your product or service particularly valuable.
Many companies focus simply on making things cheaper, faster, or better. These are wonderful attributes and definitely attract customers. However, if everyone is doing exactly that, then what can you do to stand out and uniquely add significant value that nobody else is offering? How can you figure out a way to add some type of value in a way that actually satisfies a deeper need that your customer has?
The more elements from the pyramid you can incorporate, the higher the chances are you can provide irresistible value for your customer.
It’s also important to remember that different industries may need to focus on different elements of value. For example, the food industry needs to have sensory appeal and perhaps quality. Then again, fast food may need to focus on saving time and reducing effort more than quality. A smartphone company needs to add the value of connecting for sure, and maybe also simplifying, fun/entertainment, or integration as well. But if the smartphone is too focused on being low cost, consumers might not trust its quality.
Some questions to ask yourself in your role at your place of work are:
What is the real reason our customers buy from us? What problem do we solve? What pain do we alleviate (reduce) for customers? What are some other values or deeper values that they have which we can also help them with? What values do our competitors offer that we can also improve upon? Since we can’t offer every single element, which ones are most important to focus on? What specific value do we offer customers that they actually don’t care about (and how can we stop wasting resources on it)?
Application for you personally
So how about you personally? Why do you purchase certain products or services? It’s sometimes helpful for us to ask ourselves this question so that we can understand our deeper motivation. And when we know our deeper motivation, we can discern all-the-more whether or not our consumer experience is really giving us what we truly want and need. If it is not, then we can figure out ways to actually get what we want elsewhere.
Understanding the Elements of Value Pyramid may not change your purchasing habits or the way you conduct business. Or, maybe it will change everything.
So, back to Ken at Starbucks. For him, Starbucks is much more than coffee. For him, Starbucks gives him variety, connection, design/aesthetics, sensory appeal, reduced anxiety, motivation, access, affiliation/belonging, and even a bit of hope. It seems that Ken is more than willing to pay for such value, and even get a cup of coffee as a bonus.
For sources and more information, please visit: https://hbr.org/2016/09/the-elements-of-value
English tips about the pyramid image:
Self-actualization – To realize one’s full potential.
Heirloom– Something that adds value for the next generation.
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