A few years ago I achieved Peak Business Nerd status.
I laminated an infographic from a business magazine and plastered it all over the Business Made Simple office.
But I feel justified. This is one of the best business resources I’ve come across in years.
It’s called The Elements of Value Pyramid, and it’s the result of decades of research from Harvard Business Review (HBR). They studied thousands of companies. They reviewed vast quantities of consumer research data. And from that, they determined these 30 elemental “building blocks” of value.
The implications for our businesses are tremendous — from crafting sales copy to competitive analysis to product design — but in my nerdy zeal I am getting ahead of myself. Let’s back up…
When someone is considering purchasing your product or service, they’re weighing the cost you’re asking against the benefits you’re promising.
"Is what I’m getting out of this cup of coffee (an energy boost, a moment of relaxation) worth my $4?"
That’s a question of value.
To drive sales, most of us lower the cost and keep the value the same.
But this pyramid empowers you to keep (or increase) your costs by adding more value.
Here are what HBR calls the 30 “elements of value,” organized into an increasingly narrow hierarchy.
So, let’s break down the pyramid, shall we?
The base level of value, which provides something utilitarian or useful. For example:
Reduces effort
Blue Apron delivers prepped ingredients for a gourmet meal to your doorstep, so you can open a box and immediately get to work on dinner.
Saves time
Starbucks’s mobile ordering app lets you submit your order ahead of time and skip the line to pick it up.
Simplifies
Uber makes getting around a new city easy. Push a button, get a ride. Push another button, pay for it.
Reduces cost
Target’s app highlights that its users have saved a total of $621 million and counting.
Connects
Facebook’s signup page invites you to “Connect with friends and the world around you.”
Quality
The Company Store promises that their bedding uses natural cotton and large-cluster down. Not sure what that means, but I do want a nap now.
Variety
Nature Box sends you a different set of snacks to graze on each month.
The other functional values include:
The values in the next level invite us to feel a particular way.
Reduces anxiety
Carbonite offers online computer backup to customers so they can stop worrying about losing precious files and family photos.
Rewards me
Starbucks makes frequent customers feel special with “gold status,” which unlocks free refills and other perks.
Design/aesthetics
Anthropologie invites shoppers to relax and feel more sophisticated by creating beautiful, visually inventive store spaces.
Wellness
When Cheerios touts its first ingredient as “whole grain oats,” they want to make customers feel good about their health choices.
Badge value
Fitbit fosters personal pride by awarding badges to users who reach major accomplishments, like walking 25,000 steps in a day.
The other emotional values include:
These values promise a personal transformation of some kind.
Affiliation/belonging
The YMCA offers not just a gym membership but a community that can grow and shape you.
Self actualization
Tough Mudder and other extreme races want participants to feel like they’ve reached peak athletic (and personal) performance.
Other life changing values include:
At the top of the pyramid, we’re delivering value not to the individual but to the world at large.
Self-transcendence
TOMS shoes offers value to someone besides the customer by providing a pair of shoes to a person in need for every pair sold.
1. Create happier customers.
In HBR’s research, brands who scored highly in just four of these thirty elements had higher customer satisfaction ratings than those with just one high score. (More on that methodology in the article.)
In fact, it’s worth noting that even almighty Apple scored high on only 11 of the 30 elements. That’s a good reminder to choose values that are relevant to your target audience, and then focus on executing each particular element well.
2. Analyze and improve existing products.
Sit down with one of your products and consider it in light of each of these values. We’re about to do this with one of our products, the Business Made Simple online platform, to see how we can add even more value.
Some of these won’t be relevant for us — for example, don’t hold your breath for the Business Made Simple Heirloom Edition. But other questions, like, “How could we provide more motivation for Business Made Simple members?” — could create a major breakthrough.
3. Write stronger sales copy and scripts.
Stuck on your next sales email? Look to the pyramid! Pick one or two elements of value and explore the ways your product or service delivers it. I’ve been doing this as I’ve written sales copy, and it’s like I’ve discovered an all-you-can-eat buffet of marketing angles.
When you successfully implement the Elements of Value Pyramid into your sales and marketing, it's a win-win for you and your customers. Not only will you make more sales, your products and services will improve the lives of your customers.
Launching a new product or want to increase the value and profitability of your existing products? Download Business Made Simple's Product Brief Worksheet below: