Devops for Growth

Getting Started

The elements of value work best when a company’s leaders recognize them as a growth opportunity and make value a priority. It should be at least as important as cost management, pricing, and customer loyalty. Companies can establish a discipline around improving value in some key areas:

New-product development.

Our model can stimulate ideas for new products and for elements to add to existing products. Managers might ask, for example: Can we connect in a new way with consumers? Can our customers benefit from integration with other software applications? Can we add therapeutic value to our service?

Pricing.

Managers commonly view pricing as one of the most important levers in demand management, because when demand is constant, higher prices accrue directly to profits. But higher prices also change the consumer value equation, so any discussion about raising prices should consider the addition of value elements. Recall how Amazon’s judicious increases in value helped justify higher prices over time.

Customer segmentation.

Most companies have a formal method of segmenting their customers into demographic or behavioral groups, which presents an opportunity to analyze what each of these groups values and then develop products and services that deliver those elements.

Whenever an occasion to improve value presents itself, managers should start with a survey of current customers and likely prospects to learn where the company stands on the elements it is (or is not) delivering. The survey should cover both product and brand, because examinations of the two may yield different insights. For example, the product itself may deliver lots of value, whereas customers have difficulty getting service or technical support.

The elements of value have an organizational dimension as well: Someone in the company should be tapped to explicitly think about, manage, and monitor value. One pay-TV executive, lamenting the success of Netflix, told us, “I have a lot of people working on product features and service improvements, but I don’t have anyone really thinking about consumer value elements in a holistic manner.”

The concept of value remains rooted in psychology, but the elements of value can make it much less amorphous and mysterious. Abraham Maslow emphasized the bold, confident, positive potential of psychology. The elements can help managers creatively add value to their brands, products, and services and thereby gain an edge with consumers—the true arbiters of value.