Some General Comments on Elements of Customer Value
Amazon as an example
“…achieved high scores on eight mostly functional elements, illustrating the power of adding value to a core offering. It has chosen product features that closely correspond to those in our model. For example, in creating Amazon Prime, in 2005, the company initially focused on delivering reduces cost and saves time by providing unlimited two-day shipping for a flat $79 annual fee. Then it expanded Prime to include streaming media (provides access and fun/entertainment), unlimited photo storage on Amazon servers (reduces risk), and other features. Each new element attracted a large group of consumers and helped raise Amazon’s services far above commodity status. Prime has penetrated nearly 40% of the U.S. retail market, and Amazon has become a juggernaut of consumer value. That allowed the company to raise Prime’s annual fee to $99 in 2015—a large price increase by any standard…”
Eric Almquist et al, 2016
Many elements have been around for a long time and relevance can vary depending on industry, culture, demographics, etc. Some examples:
“…Connects was first provided by couriers bearing messages on foot. Then came the Pony Express, the telegraph, the pneumatic post, the telephone, the internet, e-mail, Instagram, Twitter, and other social media sites…….nostalgia or integrates may mean little to subsistence farmers in developing countries, whereas reduces risk and makes money are vital to them. Likewise, throughout history, self-actualization has been out of reach for most consumers, who were focused on survival (even if they found fulfillment through spiritual or worldly pursuits). But anything that saved time, reduced effort, or reduced cost was prized...”
Eric Almquist et al, 2016
Digital versus bricks and mortar
Most digital organisations make consumer interaction easier and more convenient, ie saves time, costs less, provides more variety and avoids hassles, etc.
However, bricks and mortar can score high on more emotional elements like badge value, attractiveness, affiliation and belonging, etc
Research shows
“…digital technologies have been transforming physical business rather than annihilating it. The fusion of digital and physical channels is proving more powerful than either one alone…”
Eric Almquist et al, 2016
Use of the elements
The first step is to understand your customers and what they perceive as your strengths and weaknesses, plus what elements of value are important to them. Then benchmark yourself against competitors on the important elements.
NB
“…No other element can make up for a significant shortfall in quality…”
Eric Almquist et al, 2016
Summary
“…The concept of value remains rooted in psychology, but the elements of value can make it much less amorphous and mysterious. Abraham Maslow emphasized the bold, confident, positive potential of psychology. The elements can help managers creatively add value to their brands, products, and services and thereby gain an edge with consumers—the true arbiters of value…”
Eric Almquist et al, 2016