Consumers are private individuals buying for themselves and their families but how do they choose what to buy out of all their options?
Obviously it is going to vary based on the product. Someone won’t buy a car using similar value attributes to buying pet food for their dog.
Are there common value attributes for these B2C deals and relationships? (B2C refers to business-to-consumer.)
Strategy consultants Bain think so and shared their thoughts in an article in the Harvard Business Review.
The Elements of Value by Eric Almquist, John Senior and Nicolas Bloch from the September 2016 Issue. (You can read the full article on the HBR website and two others for free.) [continue reading…]
Buying has changed a lot since the Internet became popular, both for consumers and for B2B buyers. I’m looking at consumers in a separate article so here I want to answer the question…
What Do B2B Buyers Value When Making Buying Decisions?
To answer it, I’m summarising an excellent article in the Harvard Business Review:
The B2B Elements of Value by Eric Almquist, Jamie Cleghorn and Lori Sherer from the March–April 2018 Issue (You can read the original here).
Bain, the strategy consultants have produced 40 elements of value which they fit into five major categories. They have also look at what consumers value when buying.
The Main Categories of B2B Values
The Customer Value Attribute Map is an essential tool to help you focus on establishing and maintaining a competitive advantage based on differentiation (i.e being different in ways which matter to the targeted customers.)
It goes by different names:
- W. Chan Kim and Renee Mauborgne call it the Strategy Canvas in Blue Ocean Strategy, (This is probably the most famous of the names due to the popularity of the book.)
- Cliff Bowman calls it the Customer Matrix in Competitive and Corporate Strategy,
- I call a Customer Value Attribute Map (because I feel that’s the most descriptive) and
- others call it a Customer Value Matrix.
It doesn’t really matter what you call it as long as you use the basic concept to get crystal clear about what particular customer segments or niches want and what you and your closest competitors offer. This way you can see areas where you are better than them, where they are better than you and where one of you offers a unique attribute.
Just don’t confuse it with the Customer Value Map which shows the fair value line of value for money between low price, low value brands and high price, high value brands and where your business lies in relation to that fair value line. [continue reading…]
There are many ways to differentiate a business. One of the easiest to understand is to find an unoccupied position on the customer value map where there is latent demand from customers.
What Is A Customer Value Map?
It’s a graphical representation of your market with price on one axis and customer value (i.e. what the customer gets for her money) on the other.
Customer value has many different components or attributes but at this stage, assume that value has a strong relationship with price along the lines of the old cliché… you get what you pay for.
This cliche is used to justify spending more on an item because (generally) price is a reliable signal of inherent quality.
An Example of A Customer Value Map
Here’s an example from the car industry which shows the fair value line for different brands. [continue reading…]
I introduced the concept of order winners and order qualifiers in my article on key success factors and now I want to delve into this important topic in more detail.
How Customers Chose To Buy Or At Least Rationalise Their Purchase Decisions – Order Winners, Orders Qualifiers & Customer Value
Customers make their purchasing decision emotionally and logically on a perception of customer value for money.The unconscious mind communicates the decision to the conscious mind at lightning speed and leaves the conscious mind to look for the logical reasons to back up the purchase decision. [continue reading…]
The full title of this book by Robert Woodruff and Sarah Gardial is
Know Your Customer: New Approaches to Understanding Customer Value and Satisfaction
In my review posted on Amazon.co.uk, I gave this book Four Stars. This means it is Good and Well Worth Reading, provided you don’t mind the academic nature of the book.
Here is my book review.
A challenging read
I read a great academic summary by Robert Woodruff on customer value and how you had to consider issues at the different levels of the customer’s thinking.
I was encouraged to buy this book, expecting to learn a lot. [continue reading…]
In recent years, I haven’t done much blogging but I’m intending to get back into the habit of writing two or three articles a week, as well as continually to be a prolific business book reviewer on Amazon.co.uk.
I’ll be blogging in two places, here on my Business Development Advice website and also on my business strategy blog, Differentiate Your Business.
Last week I wrote an article on DYB that looked at adding customer value by taking away something taken for granted.
It was inspired by newspaper articles on the topic of naked house cleaning. Yes customers were paying £45 an hour to have (not surprisingly) a young woman clean their houses in the nude. And not surprisingly, most of the customers were men!. [continue reading…]
The full title of this book by Simon Kelly, Paul Johnston and Stacey Danheiser is
Value-ology: Aligning sales and marketing to shape and deliver profitable customer value propositions
In my review of the book posted on Amazon.co.uk, I gave the book Two Stars. This means Disappointing.
Here is my book review.
I had high hopes for this book but unfortunately I’m left feeling it is “intellectual claptrap”. I know that sounds harsh but let me explain.
It’s one of those books that you can read paragraphs and get no meaning from and, when you go back to read them again, you realise that it’s describing something obvious to anyone who has commercial experience but it’s dressed up in corporate-business-speak. [continue reading…]
The full title of the book by Lanze Thompson is
The Consumer Value Model: Know The Perceived Value of Your Products & Services and Convert Inquiries Into Purchases
In my review posted on Amazon.co.uk, I gave it 1 Star.
Here is my review.
Too small to read
This is a topic I’ve read quite a bit about so I was interested to see how the author could contribute to the issues involved. [continue reading…]
The full title of this book by David J. Pannell is
How to Influence Buying Criteria and open doors to More Business, Better Margins in Less Time
In my review posted on Amazon.co.uk, I gave it 3 Stars.
Here is my review.
Worth reading if price versus value is a consistent problem
This book looks at the issue where customers focus on price when there are clear differences in value between competing products. The challenge for the sales person (this book is sales rather than marketing focused) is to open up the conversation. [continue reading…]