Every business in the world right now is talking about how to better communicate value to its customers. Our agency, along with many others, is briefing clients on value case studies and preparing projects that aim to convince consumers that top brands are relevant and worth the price premium over store brands and lesser competitors. There is a lot of talk about what “value” really means. Elements include product performance, of course, and even some mentions of terms such as “brand trust.” But what has been missing from far too many calculations is consideration of how brand marketing itself can add value.
At his m-cause blog last week, Ryan Jones writes about the idea of a value equation, beginning with a great quote from Ron Shaich, CEO of Panera Bread: Value is about the totality of the experience. This got me rethinking about common value equations from the marketing textbooks. The common formula for customer value is (Product Benefit + Brand Equity)/Cost.
But this formula fails to consider one large source of value that should be added to the numerator of this equation: the added value of the marketing itself, where applicable. I’m talking about Marketing with Meaning, of course. By creating marketing that people choose to engage with, marketing that itself improves people’s lives. Of course the textbooks and company trainings don’t include this (yet), because they are used to a world in which advertising is a cost of delivering eyeballs to a product offer and brand equity. It has always been a necessary expense, rather than a valuable investment. It’s time to evolve the value equation.
Panera Bread’s offer of free Wi-Fi service in its restaurants is clearly an example of added value marketing. When Pringles allows buyers to create their own decorative labels, or Doritos creates a mystery flavor and invites buyers to create a name for it, people get more enjoyment for their $.99. When Vicks offers cold and flu alerts, or Similac provides a pregnancy guide, people receive valuable information that store brands fail to offer. When Home Depot teaches people how to install plumbing, or ConAgra Foods helps people make more balanced life choices, the brands are actually delivering value far beyond the products that either sells.
And so, here we have yet another reason to shift your business model to the method of Marketing with Meaning. In this space, I have shared how meaningful marketing grows short-term sales, builds long-term equity, and allows for more efficient cost savings. Now add “improving the customer value equation” to the list.
My dream is that marketers in conference rooms around the world begin asking themselves: “How is our marketing plan improving the value equation?” Suddenly that annoying TV ad or useless sports sponsorship looks a lot more “costly” than ever, and meaningful marketing becomes the most logical direction to turn.
