Which of Bain’s 30 Elements of Value are Important to your Customers?
Companies can succeed in many different ways. However, increasing the perceived value of their products and services is by far the most impactful tool they can utilize. Bain’s 30 Elements of Value introduce fundamental attributes companies can choose from, combine, and deliver into their offerings. The right combination of values results in stronger customer satisfaction and loyalty. Furthermore, delivering more value accounts for a steady revenue growth, according to the research.
What are the 30 Elements of Value?
The authors of the model have combined three decades of experience doing consumer research at Bain & Company to identify 30 elements of value. Their model extends Maslow’s ‘hierarchy of needs’. They have arranged the elements into a pyramid: ‘functional’ at the bottom, ’emotional’, then ‘life changing’, and ‘social impact’ at the top.
- Some functional elements are: ‘saves time’, ‘makes money’, ‘simplifies’, ‘reduces risk’, ‘connects’, ‘reduces effort’, ‘quality’, ‘reduces cost’.
- Examples of emotional elements are: ‘reduces anxiety’, ‘rewards me’, ‘nostalgia’, ‘provides access’, ‘fun/entertainment’, ‘wellness’.
- Life changing attributes are: ‘motivation’, ‘provides hope’, ‘affiliation and belonging’, ‘heirloom’.
- ‘Self-transcendence’ is the only element at the top of the pyramid.
The attributes have different relevance depending on demographics, culture, and industry. For example, people value cost, variety, quality, and rewards when grocery shopping. At the same time, they appreciate reduced anxiety when buying an auto insurance.
How to Choose the Right Element(s)?
To decide on the right combination of elements, businesses may try to figure out which ones are the most important. Should they aim at the ones at the top more so than the elements at the bottom? Could they be successful by focusing on the functional elements only? Bain’s research answers these questions.
It turns out that perceived quality matters the most. Even more surprisingly, no other elements can compensate the lack of quality. After ‘quality’, the next most significant attributes depend on industry. For example, ‘variety’ is second for grocery and apparel retail, while ‘provides access’ is the second most important for consumer banking.
Another interesting finding is that customers believe they receive more value from digital than brick-and-mortar businesses.
Which Values to Focus On?
Start by looking at the elements important to your industry. Then evaluate your performance on those attributes relative to your competitors. If you find a weakness, that is the element to focus on first.
Next, consider adding a new element, aligned with your brand and capabilities. Adding value has a huge revenue growth potential.
Last but not least, ensure that leadership is well aligned with the values the business delivers. A leader from the organization should be appointed to monitor and holistically manage the elements of value crucial to the company success.
Explore more of the Bain’s Elements of Value via their interactive graphic here.
Learn how Simply Flows brings important elements of value to life.