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.)
A follow-up article looks at B2B Buyers and what they value.
What Do Consumers Value When Buying products And Services?
The authors identified and then split 30 value attributes into four main categories:
- Life changing
- Social impact
They presented these factors in a pyramid resembling Maslow’s hierarchy of needs, the well known theory about the drives that motivate people into action.
1 Functional Values For B2C Buyers
The common saying is that people don’t buy a drill for the drill, they buy it for what it will do i.e. make holes. This is the functional value of the item.
Inevitably there are a lot of categories and, according to the article, these functional values are:
- Saves time
- Makes money
- Reduces risk
- Reduces effort
- Avoids hassles
- Reduces costs
- Sensory appeal
Some of these are quite hard to understand or interpret. The article makes the point of taking an attribute like “convenience” and then digging deeper to find out why e.g. saves time, reduces hassles etc.
But is this enough?
The supermarket I go to most often is Asda. If asked, I’d probably say convenience was the big reason. I’d indicate it has a location advantage because it is slightly nearer than the next closest supermarket. Does that mean it saves time? Not necessarily because one of the reasons why I’d go to the other is because Asda can be very slow to checkout, especially at traditionally busy times. You often have to queue at the self service tills.
Anyway, I’ll expand on this issue of interpreting the value attributes later on.
2 Emotional Values
- Reduces anxiety
- Rewards me
- Badge value
- Therapeutic value
- Provides access
Again a bit hard to interpret.
3 Life Changing Values
- Provides hope
- Self actualisation
4 Social Impact Values
Just the once this time..
Overall, I think these 30 values are helpful as a checklist to identify the attributes buyers are likely to be using to make decisions between you and your competitors.
Do These Value Impact On Revenue?
The authors found that high scores on more value attributes did transfer into higher revenues. They also found that more values increased the Net Promoter Score, meaning more customers were positive advocates on the supplying business.
Why Do You Buy?
I can seem a bit strange talking about the attributes involved in a buying decision so I encourage clients and readers to think about their own purchases.
You can look at what you’ve bought and try to identify why you bought that product from that supplier. It’s well worth trying for different categories but also some different products in the same category.
Using These Buying Values To Improve Your Value Proposition and Marketing
I’m planning to write a separate article about how small business owners can use this research from Bain to help them think through their customer facing strategies.
In the meantime, it was an essential part of the research to standardise value attributes across many different consumers and products and services.
If you’re going to use these attributes, I recommend you tailor them to your business so that there will be common understanding between you and your consumers.
Going back to my supermarket example, I think you would split out convenient location, probably into convenient to home and convenient to work and have at least one separate category for the check-out experience.
You want information you can use to make decisions to improve your business. To achieve that goal, you can’t afford ambiguity in the answers to a survey.
I recommend you read the article at the HBR website.
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Paul Simister is a business coach who helps business owners who are stuck or struggling, to get unstuck. You can then start attracting, converting and keeping more customers. If your business is based in the UK and you feel stuck, get a Business SOS consultation (please click) with me to get you unstuck.Don't forget to download and read my FREE Report - The SIX Steps PROFIT Formula: The Simple Rules That Every Small Business Owner Needs To Know available to download at Six Steps Report (Please click).