Every time a customer pays for a "value form" he is thinking: you get something that I want more than I need money
So, what makes him to take this decision? To think like that?
- Studying your customers makes you learn about what they value more than money
- As we said, this depends on and changes with time, place and environment
- So many factors you can figure out regarding different businesses
- But there are some consistent factors that ate the same across like 90% of businesses about what customers value more
That is what is called "Economic Values"
- They are 9 values
- You should consider them regarding your business. Not all of them should apply to every business out there. Remember there are always exceptions. This is NOT exact science
- They mainly lie into 2 categories:
- Convenience: this value make the customers more convenient using this "value form" – think about the logical measured decisions
The usual brands with the normal prices, that most people can use every day mainly lie in this category
- Fidelity: this value make the customers live better an amazing high-quality experience using this "value form" – think about emotions and subjective decisions here
All the luxurious very expensive brands mainly lie in this category
Note that: most businesses focus on one category more than the other. It's more profitable if you focus only on one category than try to level both of them. Besides, some experts say you won't be able to focus on both of them equally (I don't really buy this)
So let us state the 9 economic values:
1- Efficacy [convenience cat.]: how good does it work?
Example: competitive products
2- Speed [convenience cat.]: how fast does it work?
3- Reliability [convenience cat.]: can I depend on it to work?
Example: mount climbing gear X)
4- Ease of use [convenience cat.]: how much effort it requires to work?
Example: manual vs. driven land mowers
5- Flexibility [convenience cat.]: how many things does it do?
Example: smart phones
6- Social status [Fidelity cat.]: how people think of me if they see me using/having/with it?
Example: a Chinese phone vs. iPhone
7- Aesthetic appeal [Fidelity cat.]: how attractive is it?
8- Emotions [Fidelity cat.]: how does it make me feel?
Example: clothes, watches
9- Cost: the last thing people make decision upon. Did you see that coming!!
People think and make decisions depending on all the previous 8 values before they consider the cost factor
So, this will help you categorize the choices you are making in the iteration cycle, depending on which category (convenience of fidelity) you want to focus on, and what value you want to improve
And you need to think very well about the cost being the last factor to consider. This info. is a concept changer :)