Understanding customer value is a crucial aspect of crafting a compelling value proposition. It is also a fundamental element in planning a marketing strategy, communications campaign, and designing the customer journey. This understanding is crucial because when customers decide who to purchase from, they will compare your price with what they value. The result of this comparison will determine which enterprise the customer will choose to buy from.

Maslow’s Hierarchy of Needs

To understand what drives customer value and how it influences purchase decisions, Almquist, Senior, and Bloch (2016) developed a set of building blocks. These building blocks enable enterprises to assess and design their respective propositions. The building blocks and how they shape value are rooted in the psychological theory “Maslow’s Hierarchy of Needs” (McLeod, 2024).

Maslow’s model, a well-known theory for explaining human motivation, provides a practical framework. It helps enterprises understand and categorise their customers’ unmet needs. This model aligns human motivation with different levels of needs in a hierarchical order. It begins with the most fundamental needs, including food, shelter, and water. It then progresses to the needs associated with the pinnacle of human existence. As you move up the hierarchy, the previous need level will be satisfied. Thus, it provides a valuable tool for enterprises to understand their customers’ needs.

Maslow’s model provides some insight for enterprises to understand how to categorise their customers’ unmet needs, but it does not respond to what customers value.

Value Pyramid

The strategic value of ‘The Elements of Value Pyramid‘ lies in its ability to provide enterprises with an approach to analyse. It helps identify the elements of value that customers aspire to receive for each identified need. This theory, like Maslow’s, arranges needs in a hierarchical structure. The base is ‘functional’, followed by ‘emotional’, ‘life-changing’, and ‘social impact’ at the peak. The goal is to find the right combination of elements your customer values. The more value elements aligned with fulfilling your customer needs, the more customer loyalty will evolve. This facilitates sustained revenue growth.

Therefore, becoming familiar with and integrating ‘The Elements of Value Pyramid’ into your planning will facilitate growth and enable your enterprise to plan and execute communication campaigns that deliver value to your customers.

References

Almquist E, Senior J, and Bloch N 2016, ‘The Elements of Value’, Harvard Business Review Magazine, September 2016, accessed 25 February 2025, <https://hbr.org/2016/09/the-elements-of-value>

Almquist E, Senior J, and Bloch N 2016, ‘The Elements of Value’, Bain & Company, August 2016, accessed 25 February 2025, <https://www.bain.com/insights/elements-of-value-interactive/>

McLeod, S 2024. ‘Maslow’s Hierarchy of Needs’. Simply Psychology, 24 January 2024, accessed 25 February 2025, <https://www.simplypsychology.org/maslow.html?ez_vid=2cae626a2fe896279da43d587baa3eb663083817>