Pricing VALUE…is an emotional COST

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Albert Einstein said “Strive not to be a success, but rather to be of value”. Einstein’s quote places a rather interesting twist on success and if I’m reading between the lines it’s not a positive success twist. Perhaps his implication is that “Success” is and always has been a self-centered journey with very little human advancement. But, as I’m prone to do I could be over analyzing Einstein’s tale…but my hubris tells me I could be spot on (hehe!). Visioning a future where success is not measured by some sort of materialistic advancement metric but on how it delivers VALUE on human life is a future worth paying for. So, the question becomes what truly defines value? Is it the IPhone? Is it Google? Is it Innovation? Could you argue that value is in the eyes of the beholder? Answering yes to all these questions wouldn’t be incorrect…and there lies the beautiful complexity. Like “happiness” we all want it every day of our lives, yet notice I said “we all want it” and not providing it. Providing happiness one can argue is analogous to providing value, yet when we look at value subconsciously we expect the boomerang effect that returns the favor. Businesses everyday preach the value of creating value for their customers with the expectation of a nice monetary return, but is that what value truly represents? As I’ve mentioned there’s a beautiful complexity when it comes to evaluating true value and the reason for that is when placed as a noun or verb its definition can be ambiguous at best. Apple’s IPhone 7 will probably be priced at $599 (just guessing since previous phones were around that price); can you say Apple’s IPhone 7 will have a true value of $599? Who will that value belong to Apple or the customer? Apple will indeed argue that the value is pushed to the customer…as long as there is a demand (hehe!). Now, an APPLE fan could argue that they are receiving value from the IPhone and I wouldn’t attempt to try to win that argument and probably would say congratulations…and under my breath murmur “a valued sucker”. Certainly we all place value on different things that’s what makes us all unique as human beings, and placing a cost on VALUE can be a very emotional experience.

Emotional Cost of Value (Blue Ocean Strategy)

My wife is an APPLE fan…a diehard APPLE fan. It’s clear there’s an emotional tie my wife has with APPLE products so the value is intrinsic and unwavering APPLE like any other business has used value as a way to obtain very healthy monetary returns, but unlike other companies they’ve done a stupendous job tapping into that “emotional happiness” value that I referred to earlier. They’ve used their brand to promote this sense of quality of life that creates a tremendous amount of value, and oh by the way you take clearer pictures on your phone. Its centers of excellence marketing that places a $599 value on emotion. I stress to my clients every day that providing value to your customers is not a Blue Ocean Strategy because everybody is doing it, it’s delivering the emotional cost of value back to the customer that creates a Blue Ocean. Let me repeat: “Delivering the Emotional Cost of Value back to the customer creates distinction” A.H. (yes, I’ve coined it LOL!). Companies like APPLE, Starbucks and IBM have created this environment where there’s an emotional attachment to their products that quite frankly override their exorbitant prices. In the marketing world we call them the specific valued principles that the most successful companies exploit to get you and I hooked on the craziness of waiting in long lines or getting on a year waiting list to obtain their product. For years marketers have used Maslow’s Hierarchy of Needs to help identify customer behaviors but as the consumer have evolved over the years the traits and expected behaviors of the customer is no longer that clear cut. There’s a gumbo soup chocked with different flavors of why today’s consumer make the purchasing decisions they do. However, the one constant is that there is an emotion tied to that decision to spend hard earned dollars on something that will be obsolete the following year. Going back to Einstein’s quote (“Strive not to be a success, but rather to be of value”), today and tomorrow’s corporation will have to deliver quality, innovation, and emotion to customers just to stay in business. The 3 D’s (Disruption, Differentiation, Diversity) will no longer be the goal, they’ll be the norm. Companies that emulate their customers “Emotion” and not concentrate solely on obtaining it from them will be substantially successful. Value with regards to business will have a different definition in that it will not only be described as a receipt to the customer, it will be regarded as an emotional binding contract between business and consumer. In an article by Smart Insights February 2012 they explained the true power of “Emotional Branding” and why it’s the new value:  

With this much emotion involved in decision making, it’s easy to see how creating an emotional bond with customers makes a direct contribution to building profitability. Emotional branding clearly differentiates companies from their competitors and helps to create deep intrinsic relationships between brands and consumers. Relationships with an emotional dimension are more likely to resist the temptation to defect than comparatively superficial price or convenience-based ones. Creating an emotional bond with customers requires more than good marketing – a company engaged in emotional branding puts the needs of its customers ahead of the product it’s selling. Pepsi, Oil of Olay and Mercedes are a few major brands requiring little introduction. Their appeal ranges from youthfulness to status, but these brands share a deep emotional connection with their customers which translates into unwavering consumer loyalty. Apple is another brand illustrating the effectiveness of emotional branding. Apple almost went under in the 1990’s but amazing brand rejuvenation propelled it to 21st century super-brand status.   Apple has succeeded in giving its product a humanized touch in an ever-evolving technical world. Responding to consumer anxiety about technology’s evolutionary speed, Apple managed to make its customers feel like part of its brand by making it clear the brand understands their needs. When people form an emotional attachment to a brand the strength of that bond is not dissimilar to an attachment to another person. It becomes hard for that person to separate themselves from one brand and begin a new relationship with another. Emotional branding can only be achieved by putting what customers deem most important ahead of everything else. If you can master the skill of establishing a relationship with your customers at this level, you can count them in for the long haul!

To read the rest of the article click on link: http://www.smartinsights.com/online-brand-strategy/emotional-branding-means-customers-stay-loyal-for-the-long-haul/ 

 

My Suggestions on Creating “Emotional Value”

 

  • Create “Creative Transparency”: Identify innovative ways to communicate to your customers a behind the scenes view of your company’s “Vision” in action (e.g. newsletters, blogs, monthly SKYPES, community involvement etc.)
  • “CBO” Impact: Ensure that your entire team follows the basic principles of effective communication with the consumer: Clear, Behavioral, and Obtainable. Your corporate value has to be clear, behavioral and obtainable for the consumer, any misstep in any of these 3 areas will cause ambiguity and indifference.
  •  Identify “Emotional Triggers”: The Budweiser Super Bowl commercials feature a cute puppy, Starbucks features “The Experience”. Identify those consumer emotional triggers that align with your corporate vison/philosophy, these are not catchy phrases or images but emotions that are the foundation of your vision.
  • Create “Touchpoints”: Plan for the right communication frequency balance with consumers. Social Media/Digital Access has caused an overload communication touchpoints with consumers that have had a negative effect. Identify the proper frequency of communication with consumers, offer opt-ins, engagement surveys and other incentives for engagement.
  • Destroy Customer Satisfaction Surveys: Perhaps the most controversial, however, customer surveys have the “Check off box” perception. Consumers don’t complete them after service and companies do not gather honest feedback from them.
  • Create a “Value Action Step Survey”: Consulting Companies like McKinsey & Co often create these case studies where they ask certain SME’s for their opinions, and then follow up with the results of those opinions. Companies can take a page out of McKinsey & Co playbook by offering a survey that’s value based followed by clear action steps of execution. Today’s consumer wants to receive verification that their input has been acknowledged…customer surveys do not accomplish that value need.
  • Reinforce “Thank You”: Goes without saying, a simple and sincere thank you to your customers sometimes goes further than a discount.

Value 2.0

I for one am excited about what the future holds for the word “Value” because I think we’ll no longer see its appeal as something we receive…but something we sincerely provide. Surely, businesses will continue pursuing the quid pro quo that sometimes come with value but the companies that build an emotional valued relationship with their customers will gather their unwavering loyalty. The Value 2.0 model will entail a more disciplined approach on the part of business; everyone from the CEO to janitor will have to demonstrate through communication and importantly their actions on building a personal value connection with their customers. The price of VALUE is a very emotional yet personal cost to the consumer as it should be with business, and the APPLE’s & Starbuck’s of the world have figured out that it’s the “Emotional Value” that creates that beautiful Blue Ocean.

Pricing VALUE…is an emotional COST

 

Thanks!

Andre’ Harrell

AH2 & Beyond Consulting

 

 

  

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