Experiencing Value
by Diana LaSalle

A recent study by The Weatherhead School of Management at Case Western Reserve University confirmed what we already know in our heart of hearts, satisfaction has little to do with loyalty. What was a surprise to them however, was clear evidence that trust wasn't the deciding factor either, at least not trust alone. What customers are looking for first and foremost is value, not the monetary kind of value, but value that impacts a person's life. To determine the real, loyalty-building value of your products and services you have to go beyond the features, functions and processes we are all so fond of and look instead at two critical factors, the value your offering brings to a customer's life and how the experiences that surround and support your offering add to or detract from that value.

Determining Value

Most companies are used to thinking of their offerings in terms of features and benefits. An association might offer education (a feature) and members gain knowledge (a benefit), but value is something more. It represents not what a product or service does but how it impacts a person's life. For instance a seminar that increases someone's professional skills might help him do a better job. This benefit of 'doing a better job' can result in greater self-esteem, growth, and perhaps even recognition or advancement. These results are the real value of the seminar. Every benefit a company provides should have identifiable value that enhances the personal or professional life of its customers. So how do we figure out exactly what that value is?

Psychologists tell us that all human beings operate on four levels or dimensions: physical, emotional, intellectual and spiritual, making up what they call the Whole Person. In the past, this theory helped people understand how to live a life in harmony, but we find it also applies to value as well and how consumers recognize and experience the value of what they purchase.

The Physical Dimension
governs basic survival needs like food, shelter and all our physical requirements as well as anything experienced through the senses. Values we recognize on this level include comfort, pleasure and exhilaration.

The Intellectual Dimension
represents our analytical self where we process objective value, the kind that is measurable and quantifiable like savings, interest rates, and supply and demand. It's also were we appreciate excellence, performance and choice. Business focuses here because it's something they can wrap their arms around, but it's made us all too price conscious and willing to believe value only means low price.

The Emotional Dimension
is where we experience some of our most powerful and memorable consumer reactions and where we process subjective value or that intangible value that is highly personal. This dimension is also where loyalty begins. Intellectually you may know you should keep doing business with a company that performs well but the bond that cements loyalty is emotional.

The Spiritual Dimension
governs anything that touches our core being, like art, music, nature and creativity. The other dimensions are usually involved too, which makes it all the more potent. This is also the level where trust resides. It's what every company should strive for because while trust isn't the only factor in creating loyalty, without it the staying power of that loyalty is still in question.

Everything customers buy has some value that registers on at least one level. What's more, the more levels a product or service impacts the more value it has. The Pentium chip, for example, scores three hits on the intellectual level performance, quality and a reputation for excellence. This makes it more valuable than a product that may have the same performance and quality without the brand equity.

Looking at value not only helps companies determine where they stand today you can also identify possibilities for enhancing value. For example if you currently offer convenience, you may be able to add choice. This exercise is especially valuable for companies who sell products or services that have become a commodity. BP service stations sell the ultimate commodity, gasoline. Yet they've enhanced value by using solar panels to save energy, and some pretty slick new pump stations with Internet connections that enable people to get weather reports and directions. Both offer a wealth of value.

Once you've identified the value of your product or service you can use this insight to guide marketing, product development and most importantly, the customer experience.

The Experience Factor

One of the misconceptions many businesses operate under is the belief that once they've created valuable products or services their job is done. The fact is, it's just begun. If your primary value is convenience then every experience your customers have with you should promote convenience. If well-being is your strength then doing business with you should be as stress free as possible. A professional association I belonged to had some great services in place but the experience of accessing them was so frustrating it took away from their value. When operational issues were corrected and the experience improved, retention numbers went up 25% and non-dues revenue increased 50%.

You can make improvements too by looking at your company and all its offerings through your customer's eyes.

•Determine the value of each offering
•Evaluate the way you communicate value, does it speak to the right dimension?
•Chart each experience and determine its impact on customers.
•Red-flag negative experiences and do what you can to correct them.
•Identify the positive experiences and make them part of your value statements.

You can begin this process with one product or service and expand from there. What's important is to incorporate the ideals of value and experience into the culture of your organization. When you do history shows that any business that provides what the customer truly values can achieve real growth, not the growth that's eked out by downsizing, and cost-cutting efficiencies, but the real thing. It doesn't matter if your company is large or small, product or service focused if you're committed to delivering a value experience you'll be rewarded with more loyal customers and a healthier bottom line not just today but for many years to come.

This article originally appeared in the 11/18/2003 issue of marketingprofs.com