What is value in business and in life?
My first real experience with value happened in college. As an orientation leader, I was a member of a team of students welcoming other (new) students to the university, while also serving on an event planning committee for several new student events. One event in particular stood out in my mind because of the food — not just any food, but burritos from Chipotle.
Now, burritos are nothing new, especially for 2007, when this happened. But because they sponsored the event, I was able to partake in trying out an item that I never tried before, and I was blown away. Chipotle had been around for a little over a decade by then, and yet I’d never heard of the company. Sadly, my culinary adventures in Mexican food, up until that point, had been limited to just Taco Bell and Tex Mex. When I took a bite of this burrito — enormous in its size, quality and presentation— I was intrigued.
Later on, as I learned more about the company and their commitment to sustainable food choices, and the ways in which they source their ingredients, I became a lifelong customer. Back in the day, choosing meat from cows that had been allowed to roam freely was beyond my imagination. In a way, they were doing something that might have been considered ahead of its time.
Fast forward to 2019 — it’s the third day of June and I’m on my way to work. As I walked past a local bakery, I saw a sign proclaiming, “$1 food fest!” — just download this app, it says, and for the next ten days, you’ll see participating restaurants in downtown Portland (or wherever you may be) offering items from their menu for only $1! I had been to this bakery before but had never tried their sandwiches. Thus, I grew more curious and decided to download the app, and ordered a sandwich, which came with a side item and a drink. For a brief moment, I thought I’d struck gold. I couldn’t believe my luck. I jumped on the deal and thanked my lucky stars…until I received the item.
The sandwich, as it turns out, was only half a sandwich, and it looked as if a little child had taken two slices of white bread, ripped off a piece of wilted lettuce, patted down two small slices of turkey and a slice of cheese that’s incredibly similar to the ones you’d find at the grocery store (and not the deli kind either) and omitted the sauce. The “side item” was in a small plastic sample cup, hardly enough for a spoonful. Needless to say, I was incredibly disappointed as I bit into the sandwich and discovered that it tasted just as awful as it looked.
Now, this is completely different by comparison to my very first experience eating a Chipotle burrito. As I went about my day, I began to wonder what made one culinary experience so drastically different from the other, besides the dollar amount? The answer that came to mind — value. Upon first impression, one business provided me with more value than I expected, while the other one provided less than what I expected.
“Everything is worth what its purchaser will pay for it. “— Publilius Syrus, first century B.C.
Value is a broad term — that’s why Webster’s dictionary has multiple definitions of value. To me, value is more than just a dollar amount. It’s more than just customer service. It’s a holistic view of what matters to your customers. We are all customers in one way or another, for we all participate in economic exchanges in our daily lives. That’s why value has become such a well-studied subject.
Take, for example, Eric Almquist, author of “The 30 Things Customers Really Value” published in the Harvard Business Review, conducted a study with his colleagues in which they sought to define what companies can do in order to provide value to their customers and increase loyalty. In the article, he shared a triangular diagram that make up the majority of human needs. Similar to Maslow’s Hierarchy of Needs, this diagram focuses on certain elements of what humans consider to be important— wellness, safety, design, to name a few.
At the bottom of the diagram, as one would expect, are functional needs — things like variety and quality and whether it’s informational or useful. The next level— and just as equally important, are products/services that provide emotional needs — such as increasing attractiveness, provide therapeutic value or motivate healthy habits.
As one move from bottom to top, getting to the third level of value — life-changing — gets more difficult. The top level — social impact — is as difficult to achieve as Maslow’s hierarchy itself. Self-actualization is hard to define, much in the same way as self-transcendence is hard to define. However, if a business is able to meet multiple levels of needs, the higher the likelihood that they will retain a loyal customer base and increase their company’s value.
I know that for me, personally, I will continue to go to Chipotle. I will also continue to frequent Trader Joe’s, Target, and Starbucks, because each of these businesses have provided me with more value than I could possibly imagine. Trader Joe’s provides me with friendly service, efficient check-outs and plenty of staff to help every time I go to their store. Target provides me with quality, value, and aesthetically pleasing design, as well as an incredibly efficient ordering process. I know that I can always order an item via their app and fifteen minutes later, it will be ready. It’s the speed of their efficiency that wows me. And finally — Starbucks with their friendliness, their rewards program and convenience and great tasting coffee will keep me coming back, not every day, but often enough.
The point is — I realized that value is not in the dollar amount that you’re offering to customers; rather, it’s the amount that they’re getting in return. Most importantly, it’s how they perceive it. You may not agree with me on the companies above — maybe you have other companies that you’re loyal to for a variety of reasons. No matter what business or company satisfies you, whether they’re different from my list or not — the common denominator here is that the companies that you value provide you with what you need, oftentimes more than what you need.
Simply put — give your customers more than what they need. Give them what they don’t know they need. Our feelings drive our decision-making process every day, regardless of whether or not there’s any evidence of truth. At the end of the day, it’s what we feel that matters. What we feel about a business can translate into how we behave — whether or not we recommend that business to a friend, whether or not we choose to spend our money with them again — it all matters to the bottom line.