The 30 Things Customers Really Value 08/12/2016, 14*37

MARKETING

The 30 Things Customers

Really Value
by Eric Almquist
AUGUST 11, 2016

Executive teams often struggle to land innovations that will significantly grow the
business. A chronic problem is their emphasis on searching for breakthrough innovation
— the creation of a truly new, highly valued product or service that could redefine their

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industry and lead to unprecedented revenue growth. “Where’s our iPhone?” they
wonder.

Almost by definition, breakthroughs are rare. When they do occur, they usually come
from insurgent entrepreneurs who founded companies such as Nest or Netflix (today), or
Eastman Kodak or Ford Motor (over a century ago). Rarer still are breakthrough
innovations from established enterprises, Apple’s iPhone being an obvious exception.
Breakthroughs may be worth pursuing, but most companies benefit more from
incremental innovation efforts that add new forms of consumer value to their present
products and services. The trick is to determine what elements to add in order to boost
the perceived value of your offering. You don’t want to expend resources adding features
that consumers don’t care about.

While what constitutes “value” can be nuanced and vary from person to person, my
colleagues and I have identified 30 universal building blocks of value that meet
fundamental human needs. These are basic attributes of a product or service that address
four kinds of needs: function, emotion, life changes, and social impact. Functional
elements, for example, include saving time, reducing risk, and organizing. This latter
element is central to brands like The Container Store and to Intuit’s TurboTax, because
both help consumers deal with complexities in their world. The pyramid below shows
how value elements fit into the four categories.

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In our September 2016 HBR article, “The Elements of Value,” my colleagues and I discuss
the power
The 30 ThingsofCustomers
the 30 elements in the marketplace and describe how companies can select
Really Value
and integrate innovations into their products to provide value that consumers actually
want. Companies that deliver well on multiple elements of value tend to have stronger
customer loyalty and higher revenue growth rates, as Bain & Company’s analysis shows.
The research documents 50 companies that deliberately added elements over time to

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improve their propositions, either to turn around a flagging business or to accelerate

growth.
In financial services, for example, Charles Schwab has outperformed many other
investment companies by excelling on four elements of value: variety (a wide range of
investment products), providing access (multiple contact and advice channels available
around the clock), making money (generates income for customers), and quality
(numerous Lipper Fund Awards for investment performance).

Since 2013 Schwab has added several new elements of value to its services. Schwab’s
Accountability Guarantee reduces risk by refunding fees if clients are not fully satisfied
with the product. Its Intelligent Portfolios tool informs customers about the status of
their portfolios and provides investment advisory services with no advisory fees.
StreetSmart Edge reduces effort with an online trading platform to simplify complex
trading and provide an intuitive experience for active traders. And its low-fee college
savings plans provide heirloom value to parents saving for their children’s college
education.

INSIGHT CENTER Likewise, in the retail pharmacy industry,

CVS Health has embarked on a health
Measuring Marketing Insights
initiatives strategy by adding new elements
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of value for consumers, including providing
Turning data into action.
access, saving time, wellness, and
therapeutic value. For example, CVS Health
bought Target’s pharmacies, adding over
1,600 locations in 47 states. Many consumers now have more convenient locations,
which helps them save time. The company has expanded access to health care through its
MinuteClinics, providing both basic medical services, such as general exams, summer
camp physicals, vaccinations, and the like, as well as assorted wellness services, such as
contraceptive care and smoking cessation.

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Other companies have judiciously added elements of value to their core proposition.
Throughout 2015 Uber added services to integrate multiple aspects of consumers’ lives,
from delivering meals and groceries to providing flu shots. Discover added a feature that
allows cardholders to instantly freeze and unfreeze their accounts without canceling their
cards, reducing risk and reducing anxiety for cardholders. And Spotify added a feature for
runners in 2015 that detects their pace and finds music to match it, hitting on elements of
wellness and motivation.

The search for elusive breakthroughs can make the entire innovation process
intimidating and discouraging. To help, think about which new elements of value will
resonate with your customers and which can be delivered effectively by your company.
Judiciously adding elements can bring new life and growth to existing products as well as
build customer loyalty — with far less risk and lower costs than hunting for
breakthroughs.

Eric Almquist is a partner with Bain & Company’s Customer Strategy & Marketing
practice and the global head of consumer insights for Bain.

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Related Topics: INNOVATION | CUSTOMERS

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7 COMMENTS

Dawn Detelich 4 months ago

Great article! I love the pyramid to sum up the basic needs of most of our clients. It reminds us that the
solution can be developed in a number of ways and forms.

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