You sell a great product, but is it something that holds value for a customer? Value isn’t what you might immediately think. Sure, there’s the “dollars and cents” valuation that compares what the product is worth to what one pays. But value-based marketing is about more than that.
Value-based marketing is a way to reach your target audience by addressing personal value. It’s a customer-centric marketing strategy that looks at a broad range of ways to offer benefits to potential customers. Many of those benefits aren’t easily reducible to cash. Think belonging and connection, but also function and, yes, economic value.
Why your customers care about value
In today’s crowded consumer market, people have lots of choices about what they buy. Unless you sell a very unique product, there’s always the chance your target market might just go to your competitor. If you do sell something truly unique, they might not buy the item at all unless you give them a reason to.
That reason can be the value your product brings. Beyond just price and product features, value is the net benefit your customers get from buying from you. It is your competitive advantage. Understanding the value of your product and incorporating the promotion of that value in your business model can help you reach and retain customers.
Think about a popular consumer item like a foam finger at a football game. Certainly, there’s no practical value in an item like this. It doesn’t make life easier or solve a problem. But it does make the football fan feel part of the game experience, giving them value in social connections and camaraderie. What else do fans want at a game than to feel part of the action?
That’s what value marketing is all about: giving customers what they really want.
The four types of value you can offer
So, what qualifies as value? It’s true that many people follow a cost-benefit decision-making model. They ask the question: How much does it cost and what do I get in return? But it’s not so simple when it comes to the customer experience and customer value.
People find value in all sorts of things, perhaps in ways they’re not even aware of. In fact, value isn’t just about price but community. It’s even about how we feel about ourselves.
1. Making products that work better (functional value)
Functional value offers a practical benefit to your customer’s life. The product not only works better than the competitors’ but solves a particular pain point. Some functional benefits are avoiding hassles, reducing effort, providing information, and connecting.
Let’s take an electronic car key. It opens the door at the click of a button. It does not require you to walk up to the door, put the key into the lock, and turn so the door opens. This offers the benefits of reducing effort and avoiding hassle — especially on those icy winter mornings when a traditional key-style lock might freeze shut.
Think of a technology cord with a port that allows you to connect your cell phone to your laptop or a charging plug. You can use the cord to add power or to transfer files between devices. The connectivity of this product depends on the ports and the technology, offering value to the consumer when they get the right fit.
If your product is solving a pain point, try to hone in on its main functionality. What problem does it solve? Addressing how your product fulfills customer needs can increase its perceived value.
2. Saving money and time (economic value)
Economic value is about cost-benefit analysis, but there’s often more to it than having the most features for the lowest price. People want value for their money but also value for their time.
Let’s say a parent is homeschooling their child. They can buy a cheap printer that only prints a few pages at a time. But if the parent has to print entire book sections or long readings for students, they might see more value in an expensive printer that can handle those big jobs that used to go to a print shop.
There’s also the benefit of item quality. Any product that lasts longer than a cheaper competitor might have more value to a consumer, even if it’s more expensive.
Let’s say someone needs to replace the boiler in their home. A less expensive boiler might cost less upfront, but the more expensive model might need fewer repairs and save on household energy costs. Therefore, the higher-priced boiler might actually have more economic value over time.
3. Building connections (social value)
Social value is about community and belonging. It makes the consumer feel part of something greater than themselves and might, in fact, make them part of a social movement. An example is the foam finger at the football game. Showing engagement with the event is only part of the picture. The finger also demonstrates that the consumer is part of the community of fans and is connected collectively to the team’s success.
Some products that sell social value also offer economic or functional value. Think of socially responsible consumer products, like environmentally friendly clothing. A warm coat made of ethical materials has a practical use, offering functional value. It also does less harm to the environment, offering social value. The consumer is drawn to the product because it fosters a connection to the environment by causing less harm.
Think also of socially responsible investing. There are many options to invest money through banks and credit unions. In marketing these products, some appeal only to economic value. They might highlight financial returns and low fees, so the consumer ends up with more money in their pocket than what they initially invested. Some also appeal to social value by highlighting not only returns but also where the money is invested. Consumers might choose to only put money into companies that are socially responsible. For example, companies that protect the environment or help underserved communities.
4. Feeling good about buying (psychological value)
Most people are familiar with the idea of a product as a status symbol. Think of fancy cars, fashion brands, and icons of wealth or fame. This is one example of psychological value provided by products that show off a certain status and reflect a certain self-image. They can also demonstrate personal achievement at having reached a certain place in society.
But there are also other elements of psychological value. Products and services can have emotional value, making your customers feel a certain way. Perhaps their value is to reduce anxiety or to offer a unique sensory experience. Think of artwork, scented candles, or bath salts. The therapeutic benefits of these kinds of products generally come from how they impact one’s emotional state. Your product might have this kind of psychological value.
The possibilities for a product to have psychological value seem almost endless. It might offer motivation (think personal trainers or coaches), the thrill of coveted access (think VIP meet-and-greets backstage at a concert), or the comfort of nostalgia (think tribute bands that cover old hits). In all cases, the psychological value makes a person feel good when they buy, whether it’s to get some excitement, motivation, or a sense of calm.
Identifying your value types
As you get set to market your product, take a moment to identify the type of value you offer your customer. Is your target consumer looking for psychological value, functional value, economic value, or social value?
Remember it can be a combination of values, but there’s usually one value type that is most important. The socially responsible investor, for example, may be looking for social value when they choose a bank or credit union, even if the investor also expects to get some economic value.
You can work with your sales teams to narrow down your value types. Start by creating a picture of your ideal customer. This is who your product appeals to. Develop a customer persona, which is a realistic character you see as buying what you have to sell. Consider what value they see in your product and ask yourself:
- Do they want to make life easier? (Functional value)
- Do they want to save money? (Economic value)
- Do they want to feel connected to a community? (Social value)
- Do they want to feel good? (Psychological value)
Based on the answers to these questions, you can begin to hone in on the value you offer.
Turn your value into marketing messages
When you know your value, don’t be shy about saying it out loud. Your value should be a common thread throughout your marketing materials, from social media posts to website pages. You can keep it simple and straightforward. Consider these benefit statements:
- “Show you’re an Eagles fan with a giant foam finger!” (social value)
- “Invest with us and support environmentally friendly businesses!” (social value)
- “Stop kneeling down to scrub the floors with our extra long mop handle!” (functional value)
- “Why pay full price for a new phone when you can get a refurbished model for 30% less?” (economic value)
- “Sleep easy with our relaxation app.” (psychological value)
- “Take a breath of fresh mountain air with our vacation packages.” (psychological value)
Emotional connections also have a big impact on your value marketing. Show examples of the values in action to make this link. Consider these fictional marketing blurbs:
- “Our investors saved over 100,000 hectares of pristine rainforest last year.” (social value)
- “You are the voice of the Eagles. We win games for the fans.” (social value)
- “Every day, busy homeowners have an easier time cleaning with our extra long mop.” (functional value)
You already know why you love your product, so ask yourself why should your customers love it, too.
Share your value everywhere
Of course, knowing your value and how to express it is just one part of marketing. The next part is sharing your value wherever you promote your brand, across marketing channels.
Let’s start with your website. Have a look and see that your value proposition, whether it’s expressed as a benefit statement or as an emotional appeal, is on every page. No matter how a new customer arrives at your website and what page they land on, they should receive exposure to your message.
One simple way to ensure the value proposition is everywhere is to include it in every product description and brand overview.
Next is your social media. Of course, many brands know what messaging they should use frequently to engage followers. But what should you post?
As a rule of thumb, every piece of social media content should reflect your value proposition. The seller of the foam finger wants to post a lot of content on the fan community. The credit union selling responsible investments wants to feature ethical businesses. Whatever your value proposition, make your social media messaging consistent.
Your email marketing and text message updates should follow the same pattern. If you’re reaching out with a call to action, make it consistent with your value proposition: “Are you ready to join the Eagles community of fans today? Then get your foam finger here.”
Build better customer relationships
So, what is the result of value marketing? You’ll not only draw customers to your brand when they resonate with a particular message, but you’ll also keep them coming back. If you develop consistency in your marketing efforts, customers know what to expect from new and future products. Customer retention can help sustain your business beyond short-term gains.
When the credit union starts offering a new mutual fund, customers expect it to reflect socially responsible investing. When the foam finger maker starts selling foam hats, fans expect it will come with the same commitment to the fan community.
Ultimately, this turns your customers into brand loyalists. They’ll want to come back to your company because your values align with theirs. They’ll hopefully become brand evangelists, telling others to buy from you because of the value you offer. That kind of word-of-mouth promotion from an unofficial marketing team, your current customers, is effective and free.
Measure what works
Of course, you might not know right away if you’ve nailed the message, even when you know your value proposition. You can use some simple tracking methods to see if you’re getting the response you want from your value marketing messages.
Try customer feedback methods like email surveys and online reviews. For your digital and content marketing, you can also look at metrics like return rates and conversion rates. Tweak the messaging to find the best way to convey your value proposition.c
Need help? Constant Contact’s marketing advisors can elevate your value-based marketing by streamlining your messaging across channels, from email to SMS messaging to social media. With the addition of automation, list-building tools, and campaign tracking, you can start your campaigns easily, track their impact, and adjust for the best results.
Next up, read our blog “How to Nail Brand Messaging and Value with Lessons from Schitt’s Creek.“
