The Many Faces of Value

Enter alternative textToward a understanding of value that will reinforce your persuasive process.

You give all those folks who come to your Web site good value, right?

Now, before you go nodding your head too enthusiastically, let me ask you another question: Can you tell me what constitutes value? Oooo, that's a toughie. My dear loyal readers have heard me say often enough that value is almost never about price.

So how do we define it? And do we really need to?

I don't believe there is any one way of looking at value, but I do believe there are qualities in the broad concept of value that your particular business will answer differently for the different sorts of folks who come to you. This is why the process of Uncovery is so critical to designing an effective persuasion process. It helps you understand and then articulate the value of what you offer to the folks who come to you.

No perception of value? They're gone. But you ... stick around!

Mohanbir Sawhney, McCormick Tribune Professor of Technology at Northwestern University's Kellogg School of Management, organized his ideas on the nature of value into seven over-arching qualities. It's good stuff (I was going to say good value!) and well worth considering in your top-priority mission to become truly customer-centric. The words (abridged) are his.1

Value is customer-defined. Never forget that value is defined by those who use and those who pay for it. To understand the true nature of value, you need to get inside the minds and hearts of your customers, whether they're internal or external. Vendors must communicate the value of their products not in terms of what these products do, but what they do for customers, expressed in a language that customers can relate to.

Value is opaque. An important consequence of value being defined by customers is that it is very difficult to quantify - you need to understand all factors that customers take into consideration in assessing value, and you have to understand the relative importance that customers place on each factor. In the absence of this understanding, you are shooting in the dark. Once you understand the factors that specific customers consider when making decisions, and how they make trade-offs, you can develop a better understanding of the value propositions that might appeal to each one.

Value is multidimensional. A common myth in business is that decisions are made solely on functional value-a product's features and functionality. Value has two other dimensions as well: economic value-what these features and functions are worth to customers in terms of time and money; and psychological value-the emotional benefits that customers get from your products or your company.

Value is a trade-off. Value is the perceived worth of something in relation to the total cost that customers pay for it. This definition underscores the fact that value is a trade-off between costs and benefits.

Value is contextual. You cannot divorce the value of [something] from the context in which it will be used .... Unless you understand the end-usage context, you run the risk of creating value propositions and offerings that are irrelevant for customers.

Value is relative. Customers never assess value of an offering in isolation. They always consider value relative to alternatives. These alternatives may not be other products or systems, but other ways of accomplishing the same goals or doing nothing at all .... By understanding competing alternatives, you will also be able to focus on points of differentiation relative to these options and ignore points of parity that clutter and dilute your value proposition.

Value is a mind-set. The value mind-set is grounded in the belief that the sole purpose of a company is to create value for its customers and to be compensated equitably for its efforts. Therefore, everything the company says and does should revolve around its customers-not its products. This is a radical shift in perspective, and few companies truly embrace this idea despite their claims of being customer-focused.

Thinking well worth considering.

The value of whatever you are doing out there in cyberspace lives solely in the minds of your visitors. They decide what value means to them, and then they look to you to see if you provide it. So ask yourself if your persuasive system identifies the qualities of value that are important to your visitors. And then ask yourself if your site truly communicates these values effectively.

1 "Fundamentals of Value." Mohanbir Sawhney. Net Gains, CIO Magazine. July 1, 2003. http://www.cio.com/archive/070103/gain.html.

Volume 88: 3/01/04


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