To help people honestly answer questions of potential, Maslow identified a series of elements to which they could aspire. These ranged from mere physiological existence up to safety, love, self-actualization and transcendence.
Now, a management expert inspired by Maslow has identified the elements that make consumer products “valuable” beyond their monetary cost. And his research is offering business leaders the opportunity to improve their offering, increase their market share and, perhaps, achieve a superior level of CEO enlightenment.
Establishing the elements
It took Eric Almquist, a partner at Bain’s Customer Strategy & Marketing practice, and his team around four years to establish 30 elements of value (listed below). “I’ve been thinking about it for a long time,” Almquist told Chief Executive in an interview. “I’ve been in consulting for 37 years and all my work has been around customer demand.”
Some are functional—such as quality—and saves time, while others are emotional, such as reduces anxiety, rewards effort or offers nostalgia.
Higher up the pyramid are elements that are life-changing. These include motivating, providing hope and inspiring self-actualization.
Good examples of companies that offer self-actualization include Harley Davidson, which promotes a lifestyle, or Leica, which engenders the self-pride one might feel by using a camera that has a 100-year history and has been used by some of the world’s greatest photographers.
Finally, at the top of the pyramid, is self-transcendence, an element that allows the consumer to make an impact beyond their own needs and wants. TOMS, for example, has achieved this by giving away a pair of shoes to the disadvantaged every time a customer buys a pair themselves.
“Companies that are playing at the top of the pyramid have a strong advantage—although it would be with a smaller niche audience,” Almquist said. “There are people, particularly in the younger generation, that are highly motivated by giving back to society.”
How many elements should you offer?
It appears the more elements applied the better. After interviewing 10,000 consumers, Bain found companies that achieved high scores (at least eight-out-of-10) on at least four elements had far greater customer loyalty and grew revenue at a much faster clip.
To be sure, Almquist said companies have to be strategic about which elements they target. “It’s almost impossible for business to think about or actually fulfill on 30 elements,” Almquist said. “It would be too expensive and, frankly, it would be too confusing to consumers.”
Apple was found to have the most elements, with 11—a level Almquist suggests is probably at the upper level of what companies can achieve.
Tech firms such as Apple, Netflix and Zappos generally performed better on more elements of value than companies in other industries, suggesting there’s plenty of scope for many CEOs to do better.
How CEOs can get started
As a first step, he recommends CEOs identify the elements they’re already offering and figure out if there’s a gap with rival offerings. Once the gap has been closed, it’s then time to conduct ideation sessions with project teams consisting of people from all customer-touching departments, not just marketers, to explore new elements.
Almquist recommends taking individual elements of value and working backward to assess their relevance to the business, rather than starting from a clean slate.
“There’s also a stage of further quantitative consumer research to fine-tune a value proposition,” he said. “So typically, it’s a several-month engagement and not quite as simple as saying lets do a focus group.”
Companies outside the tech sector that have successfully added new elements include Domino’s, which admitted a few years ago that it had a quality problem, while making efforts to improve its pizza’s freshness and flavor. At the same time, the company created an ordering app that added new elements, such as saving time and reducing hassle, to its value proposition.
“Banks, for example, aren’t tech companies either, but they’ve done very well by adding more elements of value through [digital applications],” Almquist said.