There’s no questioning that customers want value when they do business with you. It’s the reason concepts like customer value management and customer experience management exist, but these topics are so broad it can sometimes be difficult to pinpoint which elements are the most important from a customer point of view.
Today, we’ll be taking a closer look at figuring out what your customers really want so that you can start devising ways to deliver. There are numerous “elements of value,” but the following are some of the most important you’ll need to pay attention to.
Understanding Elements of Value
Before you can dive into what customers want, you’ll have to understand the broad dimensions of value that they typically place importance on. When we’re talking about your business selling products and services to singular consumers, there are four broad categories that any particular value might fall under:
- Functional: The product or service does something for the consumer, such as simplifying a task or saving them time.
- Emotional: The product or service affects the customer on an emotional level, reducing stress, providing fun and entertainment, etc.
- Life Changing: The product or service fundamentally changes the customer’s life, supplying them with motivation toward a long-term goal or a sense of belonging amongst a group of like-minded peers.
- Social Impact: The product or service actually benefits society in some way, and the customer takes note of that fact.
Now, if you were starting to draw some parallels to Abraham Maslow’s “Hierarchy of Needs,” you’re on the right track. Consumer research from Bain & Company has shown how the elements of value compare to the famous psychologist’s work, and, broadly speaking, conform to a pyramid in which the most potent elements rest at the top.
You can check out the pyramid for yourself, but in brief, the highest level elements are those with social impact, followed by life changing elements, emotional elements, and then functional elements forming the base of the pyramid.
Make no mistake, due to the fact that there is a hierarchy, some elements will, on average, matter more than others. For instance, quality will often beat out other elements on the functional level of the pyramid regardless of service type, while other elements will vary in importance based on the specific industry.
What this all means for your business is that you’ll need to identify the specific needs that are most important to your customers, then work on prioritizing those through your product and service offerings to provide the maximum amount of value possible.