Do you know why people buy?
Everyone has an opinion. Few have the facts.
But if you know the facts, (of why people buy) you can sell them anything.
We buy for one reason, and one reason only…
When the (perceived) value is greater than the cost.
That is, we all have things we value. And when we believe we can get that (which we value), we open our wallets, pull out our credit cards, and buy.
So, values (perceived or real) dictate our buying behavior.
But not all “values” are equal. Out of the thousands of possibilities, only a few emerge as activating our buying behaviors.
You can think of these as “Elements of Value”.
First published by Bain & Company, these elements of value are universal building blocks any business can use to develop products or services that sell, every time.
Here’s how Bain & Co. describes these elements, in an article by Eric Almquist, John Senior, and Nicolas Bloch, published in the Harvard Business Review:
When customers evaluate a product or service, they weigh its perceived value against the asking price.
“The Elements of Value”, Harvard Business Review, September 2016.
Marketers have generally focused much of their time and energy on managing the price side of that equation, since raising prices can immediately boost profits.
But that’s the easy part: Pricing usually consists of managing a relatively small set of numbers, and pricing analytics and tactics are highly evolved.
What consumers truly value, however, can be difficult to pin down and psychologically complicated.
The amount and nature of value in a particular product or service always lie in the eye of the beholder, of course.
Yet universal building blocks of value do exist, creating opportunities for companies to improve their performance in current markets or break into new ones.
A rigorous model of consumer value allows a company to come up with new combinations of value that its products and services could deliver. The right combinations, our analysis shows, pay off in stronger customer loyalty, greater consumer willingness to try a particular brand, and sustained revenue growth.
They’ve identified 30 Business-2-Consumer/Direct-to-Consumer values and 40 Business-2-Business values — fundamental attributes in their most essential and discrete forms.
The 30 B2C/DTC elements of value fall into four categories:
- Functional
- Emotional
- Life-changing
- Social impact
And the 40 B2B elements of value fall into five categories:
- Table Stakes
- Functional Value
- Ease of Doing
- Individual
- Inspirational
I’ll break them into their respective subcategories and provide use case examples for each element.
But first, some basics.
What are “Elements of Value”?
You likely know that businesses solve problems. Grocery stores exist because people get hungry and don’t want to grow/raise their own food.
There’s a decent argument that grocery stores don’t sell food. Instead, they sell the solutions to basic needs and emotions.
- Grocers sell health, because preparing your own food is better (in many cases) than eating fast food.
- They sell savings with coupons and the fact that preparing your own food can often be less expensive than eating out.
- Recently, grocery chains have been selling simplicity with in-app purchases and having employees do the shopping.
These are all examples of elements of value. What you’re getting paid to give isn’t what you are actually selling. Instead, it’s value that holds the money.
Prove you’re the most valuable solution and you’ll get more buyers.
The Elements of Value are individual propositions that help you define how you sell your products and/or services.
Let’s get into the Elements themselves.
The 30 “Elements of Value” for Business-2-Consumer / Direct-to-Consumer
First, take a look at this image, which shows you all of them:
And let’s dive into each one.
Functional Elements of Value
Saves Time
What it is: Common time-consuming tasks or processes made easier, or even eliminated altogether.
Use case: An online platform for ordering food that is delivered to the location of your choice, Uber Eats, eliminates the need for users to travel to a restaurant, giving them the option to order a meal from hundreds of restaurants right from the comfort of their home.
Simplifies
What it is: Making normally complex tasks less burdensome and difficult to navigate or perform.
Use case: Google Home simplifies getting the information you want without lifting a finger. Whether it’s knowing if you’ll need an umbrella on your way out, or reminding you about your dentist appointment at 5 pm, Google Home can greatly help simplify your day.
Makes Money
What it is: Adding income (either side income or even salary replacement).
Use case: The Amazon Affiliate Program is a great way to monetize your blog and start to generate passive income. There are literally millions of products you can review and recommend by referring people from your blog to buy from Amazon via your referral link.
Reduces Risk
What it is: Lowering and potentially removing the potential for loss (either specific or general losses).
Use case: Many companies offer a no-hassle 30-day money-back guarantee, which means that you can get your full money back within 30 days if you’re unsatisfied with their product for any reason.
Organizes
What it is: Subdividing and separating commonly complicated or messy things, processes or spaces.
Use case: Gmail organizes your inbox into categorized tabs for easy visibility. Emails are segmented into different categories such as Primary, Social, Promotions and Updates for easy access and filtering.
Integrates
What it is: Reducing the need for multiple solutions or tools either with streamlined partnerships or being an all-in-one solution.
Use case: A multitasking machine, LG offers an all-in-one front-loading washer and vent-free electric dryer model for small spaces. This all-in-one model is specifically designed for installations in kitchens or bathrooms or compact spaces, saving space and reducing the need to buy two separate machines.
Connects
What it is: Creating the ability to meet, share experiences and easily get to know others experiencing similar feelings or events.
Use case: Meetup is a service that allows you to organize or attend groups for things you are interested in so you can meet, mingle, impart knowledge or learn from people who share your interests.
Reduces Effort
What it is: Getting common tasks completed with less time, money or energy than previously possible.
Use case: The Abbyy Business Card Reader scans and manages all of your business cards easily and accurately and converts them to a digital format automatically, adding entries to your contact list for when you need them.
Avoids Hassle
What it is: Allowing the ability to bypass or avert commonly disliked processes, events or tasks.
Use case: Most items purchased online at Walmart.com can easily be returned to your local Walmart store on your next visit, as long as the product is still in its original packaging by the manufacturer, saving the hassle of mailing it in.
Reduces Cost
What it is: Allowing the same or similar goods and services to be purchased with a lower financial burden.
Use case: One of Canada’s largest food retailers, Loblaw Companies Limited, carries the ‘No Name’ brand, a line of budget-friendly, generic grocery and household products in its stores nationwide alongside brand-name goods.
Quality
What it is: Providing better ingredients, materials or services than typically found in a given industry.
Use case: From the moment you unwrap it and put it in your mouth, Lindt chocolate delivers a rich aroma and superior texture like no other, attributed to using the highest quality cocoa beans and varying blends of finest ingredients from around the world.
Variety
What it is: Providing an increased or larger selection of solutions, allowing buyers the option to choose.
Use case: Verizon Wireless offers a variety of plans based on the philosophy that ‘one size does not fit all.’ It allows you a variety of different options to mix and match plans as per your unique needs.
Sensory Appeal
What it is: Using the five senses (sight, hearing, taste, smell and touch) to entice and appeal.
Use case: Krispy Kreme makes their hot-glazed doughnuts fresh, right in front of customers. In fact, the smell is so enticing that just by walking past a store the smell will drag you right in! They even have a neon sign that lets you know when the doughnuts are piping hot out of the oven.
Informs
What it is: Being a source of quality and trustworthy information regarding a specific matter or range of topics.
Use case: Harvard Business Review offers a variety of articles and peer-reviewed journals and is known to be a reliable source for advice on leadership, business and innovation topics from leading experts around the world.
Emotional Elements of Value
Reduces Anxiety
What it is: Alleviating fear and worry while giving an improved sense of security surrounding certain topics, events or processes.
Use case: A step above the Office 365 Business plan, the Microsoft 365 Business Premium plan offers value-added components such as device management and security features for data protection, so you can be rest assured that your data is safe.
Rewards Me
What it is: Giving bonuses and benefits to regular and repeat patrons.
Use case: My Starbucks Rewards is a rewards program that makes it easy for Starbucks customers to pay for their order through the Starbucks app and earn loyalty points (or stars) for future perks.
Nostalgia
What it is: Bringing up recollections of previous time periods, creating a longing or positive affections for the past.
Use case: Even in the age of digital music, turntables are making a popular comeback with vinyl record sales soaring. UK-based music retailer HMV stated that turntables were one of its top-selling products.
Design/Aesthetics
What it is: Producing a superior and attractive design to products, better than those of competitors.
Use case: Dyson’s precise attention to cutting-edge design has helped differentiate its vacuum cleaners from those of its competition. Their unique ‘ball’ design and cyclone technology allow for smooth maneuverability and are unique to Dyson vacuums.
Badge Value
What it is: Creating a sense of notoriety simply for owning, wearing, using or being a part of a particular brand.
Use case: To fashion fiends, a designer handbag is just the same as sporting a Rolex watch. Carrying a Gucci handbag screams an understated air of confidence and luxury and is more than just expensive eye candy.
Wellness
What it is: Appealing to and bettering someone’s health (either physical, mental or spiritual).
Use case: One of Google’s best employee perks, apart from free gourmet food, is ‘massage credits’ that co-workers can give to each other for a free 1-hour massage on campus, for a job well done.
Therapeutic Value
What it is: Promoting a sense of calm, relaxation, meditation or rejuvenation which betters the overall mental and emotional state.
Use case: Headspace is a meditation app that offers free and paid guided meditation and mindfulness programs to help people overcome stress and mental clutter, develop focus and clarity and improve their sleep.
Fun/Entertainment
What it is: Providing a sense of enjoyment and a way to pass the time.
Use case: Cracker Barrel is a family-style restaurant chain that provides a quaint table game for those eating. It’s fun to pass the small game around and see who can do the best while waiting on your food to arrive.
Attractiveness
What it is: Allowing customers and/or users to feel better about how they look.
Use case: The Body Shop allows anyone to pop into a store and sample any product on the shelf with a sample product tester, meaning anyone can experience glowing skin or a lovely scent and feel more attractive.
Provides Access
What it is: Giving entry (oftentimes exclusive or limited) for either information, products and/or services.
Use case: LoungeBuddy, now acquired by American Express is an app that allows you to purchase instant access to an airport lounge allowing you special privileges such as all-inclusive amenities, cocktails, a place to shower and more.
Life-Changing Elements of Value
Provides Hope
What it is: Giving a reason to think positively about the future.
Use case: Amway provides dietary supplements and nutritional products enriched with essential vitamins, minerals, phytonutrients, and antioxidants to promote better health and wellbeing for people of all ages all over the world. While also providing hope for those selling the products as well.
Self Actualization
What it is: Allowing for a sense of pride or accomplishment in having made some improvement in a certain area.
Use case: People buy a Volkswagen Beetle for its vintage appeal and for the pride of owning a car with an iconic design that never seems to go out of style.
Motivation
What it is: Giving energy and the potential to achieve a specific cause, purpose or goal.
Use case: The Fitbit Alta wristband is a fitness tracker that helps you to keep track of steps walked, calories burned and more. It sends small on-screen push notifications to constantly motivate and remind you to move more and reach your fitness goals.
Heirloom
What it is: Providing something that will last longer than the lifetime of the initial customer to pass on to others.
Use case: As one of the most recognized luxury watch brands in the market, a Rolex watch is one of the most collectible in the world, one that will stand the test of time to be passed onto future generations.
Affiliation and Belonging
What it is: Creating an environment of like-minded individuals in which they can garner a sense of belonging.
Use case: The LA Lakers have a loyal, dedicated fan following, especially in The Staples Center which they call home, where you can spot your favorite celebs like Leonardo DiCaprio, Denzel Washington and Jack Nicholson cheering alongside fans in the stands.
Social Impact Elements of Value
Self-Transcendence
What it is: Creating the ability and feeling of doing something bigger than oneself to benefit a larger group.
Use case: Danish toy company, The LEGO Group, incorporates environmentally friendly manufacturing processes, supports high standards for human rights, and partners with organizations such as the World Wildlife Fund (WWF), in their commitment to being socially responsible.
The 40 “Elements of Value” for Business-2-Business
Here’s a visual overview of the elements and the categories:
Table Stakes Elements of Value
Meeting Specifications
What it is: Products and services that fit into parameters (finite or emotional) set by customers.
Use case: Car manufacturers such as Toyota have to abide by strict internal product specification rules or risk having their vehicles recalled, such as the Toyota airbag recall earlier this year which is being labeled as the largest auto-safety recall in the history of the United States.
Acceptable Price
What it is: Cost of goods and services which are considered reasonable and fair.
Use case: Top pharmaceutical companies such as Johnson and Johnson, Novartis and Roche know that in order to support insurance coverage for the drugs they manufacture, an acceptable and fair price must be charged.
Regulatory Compliance
What it is: Meets or exceeds standards set by any authorities or entities in a specific industry.
Use case: Healthcare compliance and security firm, Wolf & Company works with hospitals, doctor’s offices, and clinics to make sure they are adhering to regulatory healthcare compliance laws and rules, as violations can lead to fines or other forms of legal punishment.
Ethical Standards
What it is: Maintaining a level of professional performance complying with moral and generally agreeable behavior.
Use case: Accountancy firms such as KPMG know that they need to follow ethical standards and business policies, or risk being caught in financial scandals and being fined and reprimanded.
Functional Value Elements of Value
Improved Top Line
What it is: Increasing the overall incoming revenue of your clients.
Use case: Under its parent company FedEx, FedEx Fulfillment provides packaging, warehousing, transportation, logistics, and fulfillment services to its small business customer base to manage inventory, fulfill online orders and ship them across 200 nations, while saving money and getting perks such as simple returns and 2-day shipping across the US.
Cost Reduction
What it is: Helping customers spend less money on overhead and other needs for their businesses.
Use case: IT technology and systems networking giant Cisco saves their clients money and helps to reduce costs by outsourcing IT services and projects to different parts of the world.
Product Quality
What it is: Providing products and/or services that are well-created or produced.
Use case: John Deere has boasted a solid reputation for providing top-of-the-line construction and forestry machinery, agricultural equipment, diesel engines, and other heavy equipment used for a wide range of industrial applications.
Scalability
What it is: The ability to add and grow usage to fit a rapidly growing need.
Use case: Digital Ocean is a cloud computing company that allows cloud service providers and software development firms to deploy, manage and scale applications as needed across multiple virtual servers and/or computers.
Innovation
What it is: Providing capabilities not offered by others in the same, or similar market and pushing the barrier in certain product or service fields.
Use case: US-based automotive and energy company, Tesla, is an innovative leader when it comes to electric car manufacturing and renewable energy solutions and is paving the way for sustainable energy systems and storage solutions worldwide.
Ease of Doing Business Elements of Value
Time Savings
What it is: Allowing customers to perform duties in a faster manner, or even eliminate the need to do redundant tasks altogether.
Use case: Gsuite for business and enterprise offers a variety of productivity, communication and collaboration tools such as file storage, document sharing, email and Google calendar helping businesses save time by getting more done.
Reduced Effort
What it is: Creating the ability for customers to perform common projects in an organization with less labor or fewer overall tasks.
Use case: Executive recruitment firms and staffing agencies, such as Korn Ferry, partner with large corporations and Fortune 100 companies providing data-driven recruiting intelligence services to source the perfect candidate for the job.
Decreased Hassles
What it is: Helping clients avoid common situations known to be frustrating.
Use case: Basecamp is an all-in-one project management and communication tool that not only helps businesses manage projects and communicate with their clients, but also their own in-house team, saving time and eliminating the hassle of using multiple tools.
Information
What it is: Being a source of quality and trustworthy information regarding a specific matter or range of topics.
Use case: Rhino fleet tracking is a GPS tracking solution that allows businesses to track their fleet of vehicles, trailers, equipment and more, providing access to live data and reporting to help keep companies informed about the whereabouts of their fleet at all times.
Transparency
What it is: Opening up certain or most (non-private) information in order to foster trust in a client’s business.
Use case: US-based supermarket chain, Whole Foods, requires every product in its store shelves to go through a non-GMO verification process. It encourages its suppliers and manufacturing units, to put their products through this verification process to promote industry-wide transparency.
Organization
What it is: Subdividing and separating commonly complicated or messy things, processes or spaces.
Use case: Staffing agencies use Applicant Tracking Systems or ATS, special software that enables recruiters to analyze, filter and organize a large volume of candidate resumes to narrow down targeted employees for the job, saving hundreds of manual man-hours for corporations.
Simplification
What it is: Making normally complex tasks less burdensome and difficult to navigate or perform.
Use case: Freshbooks is a cloud-based invoice and accounting software platform for small businesses that simplifies daily accounting by allowing companies to easily send invoices, manage expenses and receipts, accept payments and more.
Connection
What it is: Creating the ability to meet, share experiences and easily get to know others experiencing similar feelings or events.
Use case: JIRA by Atlassian is a tool for software development companies that enables project managers, developers, QA testers and all parties involved to communicate on one platform to add and edit issues and features, report bugs and complete tasks.
Integrations
What it is: Reducing the need for multiple solutions or tools either streamlined partnerships or being an all-in-one solution.
Use case: Hubstaff is a time tracking tool that integrates employee time tracking, along with measuring employee productivity and connects payroll so everything can be done from one platform.
Availability
What it is: Ensuring the item or service is ready when your clients need it to be.
Use case: Amazon Web Services or AWS, offers access to always available 24/7 customer support for businesses for an added fee. Enhanced support includes access to AWS’s cloud support engineers over phone, email and chat.
Variety
What it is: Providing an increased or larger selection of solutions, allowing buyers the option to choose.
Use case: Kramer Electronics designs and manufactures a large variety of professional audio-video, broadcasting, production and signal processing equipment and solutions for the commercial AV market.
Configurability
What it is: Creating a highly customizable or modular goods and services to tailor to the needs of customers.
Use case: Built for enterprise-level customers, Bluelock offers easily configurable cloud computing solutions that assure first-rate performance and a flexible growth strategy, so you can quickly scale up even when the workload gets exceptionally demanding.
Responsiveness
What it is: Quickly coming to the aid of a customer’s needs.
Use case: Businesses subscribed to Google’s subscription-based GSuite plan get around-the-clock 24/7 responsive support from a real support person. Admin verification is required, and phone, email and chat support are all included.
Expertise
What it is: Knowledge and advice regarding particular subjects.
Use case: Betterment for Business is a leading online investment advisory company that partners with corporations and other businesses to offer their employees financial advice on their 401(k) savings, retirement plans and more.
Commitment
What it is: The degree of engagement and buy-in to a customer’s success.
Use case: In their commitment to helping their small business clients succeed with email marketing and customer relationship management, leading CRM software provider Infusionsoft (now Keap) offers resources in the form of guides, tools, case studies, webinars and podcasts.
Stability
What it is: A long-running company with a solid plan and infrastructure for the future.
Use case: With offices across the world, independent advisory firm Pearse Trust advises clients who trade in international markets and is distinguished by their expertise, stability in the market, value and building partnerships with clients, some of whom have been with them for over 35 years.
Cultural Fit
What it is: Having products and services which fit into the current environment and social structure in a client’s organization.
Use case: LinkedIn for non-profits offers various products and tools to enable non-profit businesses to find board members, employees, volunteers, donors and more at a significant discount compared to LinkedIn’s standard plans.
Risk Reduction
What it is: A smaller chance or opportunity for customers to lose investments made (both time and monetary commitments).
Use case: AIG offers unique insurance plans for businesses and enterprises that include traditional insurance, along with specialized offerings such as ‘excess and surplus lines insurance’ to help businesses mitigate risk.
Reach
What it is: Increases the span of a customer’s organization further than it currently is to include larger scope (either geographically or a larger group of people).
Use case: Skype for business offers a range of collaboration tools so that business owners can conduct professional online meetings with clients anywhere in the world, from any device, just by sharing their unique meeting link.
Flexibility
What it is: Something that is more customizable or modular than products and services.
Use case: Desoutter provides manufacturers around the world with customized tightening and torque industrial tool systems for their unique assembly needs. Custom assembly solutions are developed across their many global locations by industry-leading experts.
Component Quality
What it is: Allowing customers to improve the quality of their own offers, increasing the perceived value.
Use case: Leading Smartphone manufacturers such as MI, Samsung and LG proudly state that their phones feature the extremely resilient Corning Gorilla Glass, which is known for its exceptional durability.
Individual Value Elements of Value
Network Expansion
What it is: Improving the contacts of your customers as well as the level of interaction and the quality of relationships.
Use case: WBEC-West, an organization that offers certification for women-owned business enterprises (WBEs), offers exclusive access to procurement and business networking events to just their women business members, so that they can get in front of major corporations.
Marketability
What it is: Helping clients more easily convey their products and services in a relatable and attractive way to consumers.
Use case: Google Partners is a specialized program catered to marketing agencies and digital advertising specialists which also allows users to take the Adwords certification exam and become Google Ads certified.
Reputational Assurance
What it is: Ensuring the perception of your client’s organization will not be harmed.
Use case: PricewaterhouseCoopers world-class reputation in audit quality, assurance, tax, and consulting services enhances the reputation and stature of corporations and firms around the world who are using PWC for their auditing and tax requirements.
Design & Aesthetics
What it is: Producing a superior and attractive product design, better than competitors.
Use case: Online hosted website platforms such as Wix, Squarespace, and Weebly offer aesthetically pleasing and well-designed ready-to-use website templates luring business owners to use their web platform to build their company website.
Growth & Development
What it is: Improves the personal well-being, knowledge and ability of individuals.
Use case: Taught by Salesforce experts, Salesforce training classes and supplementary resources are available on the web as scheduled or self-paced online classes and also in-person for developing and extensively training B2B sales teams on the product.
Reduced Anxiety
What it is: Alleviating stress-inducing activities or time periods and allowing users to feel more comfortable.
Use case: Bain & Company offers Lean Six Sigma principles to help commercial clients in a variety of different industries reduce anxiety when implementing critical corporate strategies, change management, cost control and digital transformation.
Fun & Perks
What it is: Dealing with your company or products is genuinely rewarding, enjoyable or entertaining.
Use case: The American Express Corporate membership rewards program is designed for businesses to pool points into one account. Companies enjoy exclusive benefits and premium rewards including merchandise, dining and retail gift cards.
Inspirational Elements of Value
Hope
What it is: Inspiring clients to feel that things will improve at their organization in the future.
Use case: Freshbooks is an invoicing software company that offers hope to their users. Small companies, freelancers and contractors can easily invoice and keep tabs on their finances in a number of ways. Bookkeeping is a topic that can really remove positive thoughts about the future.
Social Responsibility
What it is: Allowing for clients to improve their impact on the world around them (e.g. reducing their waste).
Use case: Along with supporting non-profits and government organizations and promoting environmental sustainability, leading consulting firm Deloitte encourages its employees to be socially responsible and donate their time to do pro-bono work.
Vision
What it is: Helping clients see and even forecast how their respective market/industry will act in the near future.
Use case: Bloomberg offers financial software solutions, reporting, and specialized tools to financial companies, helping them to leverage key data, analytics, and metrics from around the world to support their current and future decision-making.
Using the Elements of Value in Your Business and Marketing
There are likely multiple elements that struck a proverbial chord with you — and that is perfectly normal.
There can be more than one element in your copy. Of course, a small amount of copy (in a tiny ad or something) may limit the wording.
But what if you didn’t find multiple elements?
Add some.
Many of the elements can be achieved by adding them to your business processes without changing your products and services.
Example: Add responsiveness by making yourself available to clients or even being proactive by making a quick video explaining typical “what to expect” items. Make it part of your organizational fiber and you can claim this element.
So, find elements that are aligned best to:
- Your brand and products
- And your target industries/demographics/clients
Be careful not to confuse those reading your sales writing with Elements of Value that are seemingly thrown onto the page — not properly baked together.
List the appropriate elements you’re attempting to use in your messaging and work them together until you’ve used the elements to create your own copy compound.