Elements of Value Pyramid for Business Success

Written By: Lance Piatt

Elements of Value Pyramid for Business Success

In the grand pursuit of entrepreneurial wisdom, I have, at times, ascended to the heights of what might be cheekily referred to as ‘Business Geek’ status. I once found an infographic so compelling that I immortalized it in laminate and adorned my walls with its wisdom. This might seem comically enthusiastic, but I assure you, the resource in question is no laughing matter.

It’s known as The Elements of Value Pyramid, born from the intellectual crucible of Harvard Business Review’s decades-long research efforts. They studied thousands of companies, delving into a vast trove of consumer research data. From these depths, they unearthed 30 foundational stones of value, the individual components that businesses leverage to create worth in their offerings.

The potential impacts for your company are as broad as they are deep. Crafting sales copy, competitive analysis, product design, all these and more can benefit from the insights offered by this pyramid. But let’s not get carried away with enthusiasm just yet; there are some crucial fundamentals we need to clarify first.

Understanding Value

We frequently bandy about the term ‘value,’ but what exactly do we mean? Value arises in the mind of your potential customer when they are assessing whether your product or service is worth the cost. They weigh the benefits you promise against the price you ask.

“Does the energy boost and moment of relaxation offered by this cup of coffee justify spending $4?”

This is the essence of the value judgement your customers are constantly making.

The most common strategy to boost sales is to cut costs while maintaining the same value. But this pyramid offers an alternative: maintain or even increase your costs by dialing up the value.

Elements of Value Pyramid for Business Success

The Elements of Value Pyramid is a hierarchy of these components of value. Let’s break it down.

Functional Value

This base level offers something utilitarian. With Blue Apron, you get prepped ingredients delivered for a gourmet meal, saving you effort and time. Uber simplifies travel in unfamiliar cities; Target reduces cost; Facebook connects you with friends and the world; and so on.

Emotional Value

This level is designed to evoke feelings, like Carbonite reducing anxiety about losing files, Starbucks rewarding loyalty, or Fitbit fostering personal pride through achievement badges.

Life-Changing Value

This level promises a personal transformation. The YMCA doesn’t just offer a gym but a community that can help shape you. Extreme races like the Tough Mudder aim to make participants feel like they’ve achieved peak performance.

Social Impact

At the top of the pyramid, we reach social impact. Here, value isn’t delivered to the individual, but to the world at large. For instance, TOMS shoes donate a pair of shoes for each pair sold, offering value to both customer and a person in need.

Applying the Pyramid

According to HBR, even a high score in just four of these thirty elements results in higher customer satisfaction. Interestingly, even Apple, the titan of consumer satisfaction, scored high on only 11 of the 30 elements. This is an important reminder to focus on values relevant to your customer and execute each element exceptionally well.

Actionable Insights

This pyramid offers not just an intellectual interest but an actionable tool. You can leverage it to analyze and improve products, stimulate creativity in writing sales copy and scripts, and ultimately create happier customers. This is no mere theory but a concrete strategy for enhancing your business’s success. By incorporating the Elements of Value Pyramid into your sales and marketing operations, it’s a double victory – you increase your sales, and your customers enjoy an enriched life from your products and services.

Thank you for taking the time to read through today’s post. Our heart is to see your small business and life take off with vision and courage… We can help with that.

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Peace on your Days

Lance

Grow as a Business and Grow as a Leader –Elements of Value Pyramid for Business Success

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