Research on what customers want
Harvard Business Review have published a study on what customers value. It's therefore particularly of relevance to marketing and branding agencies and any group consulting on the subject of customer choice, whether B2C or B2B.
They came up with no less than 30 value elements that customers can look for:
The research showed the following. [Note that 'NPS' stands for Net Promoter Score, an industry metric for customer loyalty and advocacy].
- The more elements provided in a product or brand, the greater the customer-perceived value and loyalty.
- There is a positive correlation between the number of elements provided and a company's sustained growth over time.
- Companies with high scores on four or more elements from 50% of customers had:
- 3 times the NPS than companies with just one high score.
- 20 times the NPS of companies with none.
- Companies with four or more high scores had recent revenue growth four times that of companies with only one high score.
- It is not necessary to attempt to excel in all 30 elements, of course. "Even a consumer powerhouse like Apple, one of the best performers we studied, scored high on only 11 of the 30 elements. Companies must choose their elements strategically."
- One element -- Quality -- is more important than any other. After that, the critical elements depend on the business sector. Some examples they list:
- Apparel retail: Quality, then Variety, Avoids Hassles, Design / Aesthetics, Saves time.
- Discount retail: Quality, then Variety, Reduces Cost, Saves Time, Rewards Me.
- Grocery: Quality, then Variety, Sensory Appeal, Reduces Cost, Rewards Me.
- Consumer Banking: Quality, then Provides Access, Heirloom, Avoids Hassles, Reduces Anxiety.
- Food and beverages: Quality, then Sensory Appeal, Variety, Design / Aesthetics, Therapeutic Value.
The researchers mentioned that these elements of value can have an organisational element, in that someone in each company should be tasked with explicitly monitoring value. They quoted one executive admitting:
"I have a lot of people working on product features and service improvements, but I don’t have anyone really thinking about consumer value elements in a holistic manner.”
The model owes something to Maslow's famous Hierarchy of Needs, leading to the popular assumption that people cannot attain the needs at the top until they have met the ones below. However the researchers note that Maslow himself took a more nuanced view. He realised that numerous patterns of fulfillment exist. As a result, it seems safest with this model to simply count the high-scoring elements.