Bain and Company have done a lot of work to help define what customers perceive as value for both Business to Customer (B2C) and Business to Business (B2B) transactions.
They have based their work on extensive research and broken down value into individual elements. To help organise the elements they use Maslow’s theory of the hierarchy of needs. This has five levels of human needs ranging from basic survival right up to self actualisation to be the best person you can be.
They identified 30 elements in B2C transactions and 40 in B2B. This article considers the B2B elements which fall into five categories: table stakes, functional, ease of doing business, individual, and inspirational.
Table stakes is about meeting specifications at an acceptable price in compliance with regulations with ethical standards. For accountants this would cover the year-end compliance work we do.
The next level is functional elements, which are divided into economic and performance needs, such as cost reduction and scalability. Most B2B sellers focus their effort and energy on these elements.
Next is the ease of doing business which Bain groups into five categories; productivity, access, operational, relationship and strategic. Some elements at this level are objective such as time savings, reducing customer’s effort and improving operational performance with simplification and organization. For us, this could be our partnership with Xero; helping our clients benefit from Cloud Accounting.
But, at this level subjective value is introduced. This includes things that enhance relationships between parties, such as a good cultural fit and a seller’s commitment to the buyer’s organization.
At the individual level there is subjective value which seeks to fulfil the buyers’ priorities. These can be personal with reduced anxiety over the fear of failure to design and aesthetics. Or, the value can be career related like increased marketability or network expansion.
At the highest level there are purpose value elements; these are inspirational elements: those that improve the customer’s vision and provide hope for the future of the organization or the individual buyer. This could be helping customers move to the next generation of technology or enhancing a company’s social responsibility.
This is where our new lifestyle financial planning and business coaching services come in.
Image used with permission from Bain & Company.