How to Use the Elements of Value to Appeal to Customers

The elements of value pyramid is the result of a study published in the Harvard Business Review that identifies thirty universal building blocks of consumer values. The study was performed by Eric Almquist, John Senior, and Nicolas Bloch of the marketing analysis firm Bain & Company. The study helped illustrate how consumers value a particular product or service.

When weighing purchase decisions, consumers consider two things: price and perceived value. Price is easy to understand, but the perceived value of a particular product often lies in the eye of the beholder and can pose a challenge to marketers. However, using the elements of value pyramid, companies can leverage perceived value by identifying their customers’ needs and in turn build future generations of loyal customers.

Similar to Abraham Maslow’s hierarchy of needs, which theorizes how the fulfillment of physical and psychological needs influences human behavior, the elements of value pyramid identifies the core values that influence consumer behavior. By leveraging the right combination of building blocks, companies can improve customer loyalty, create sustained revenue growth, and influence consumers to try new products.

There are thirty different elements in the elements of values pyramid, which can be broken down into four main sections. At the bottom of the pyramid are functional elements, then emotional elements, life-changing elements, and finally, social impact.

• Functional elements: Functional elements are factors that increase convenience, reduce pain points, and are appealing for their variety or aesthetic value. The functional elements in the elements of value pyramid are: saves time, simplifies, makes money, reduces risk, organizes, integrates, connects, informs, reduces effort, avoids hassles, reduces cost, quality, variety, and sensory appeal.
• Emotional elements: The elements in this category focus on how a product or service makes the customer feel. The emotional elements in the elements of value pyramid are: reduces anxiety, rewards me, badge value (something that represents having achieved a particular status), wellness, nostalgia, design, therapeutic value, fun, attractiveness, and provides access.
• Life-changing elements: Life-changing elements have the power to fundamentally transform your life in some way. You may choose to buy a product or service because it helps you with self-actualization, motivation, gives you hope, makes you affiliated with a community, or can be an heirloom to pass down to future generations.
• Social impact element: At the top of the pyramid is the social impact category, which consists of one value: self-transcendence. This refers to a product or service that doesn’t just change your life, but has the potential to benefit others or change the world in some way.

Understanding the elements of value can help you gain insight into your customers' needs, enabling you to appeal to them more effectively. Consider these ways to use the elements of value to promote your business:

1. 1. Target multiple elements. A product or service usually satisfies multiple elements on the value pyramid. One customer may buy a coat because it keeps them warm, makes them feel good, serves as a status symbol, and because the company donates a percentage of profits to charity. Targeting new elements gives the customer more reasons to choose your product over a competitor’s.
2. 2. Remember that different consumers focus on different elements. A busy parent may choose to go to a grocery store because it's near their house, a college student because they can get a rewards card that saves them money, and an athlete because they can find the best-quality protein drinks there. Different customers have different priorities: You may decide to target a large cross-section or go deep.
3. 3. Conduct market research. Analyze the elements of value your competitors are using in order to identify gaps that your company could potentially fill. This can help increase your value proposition and give you a competitive advantage.

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