Constructing a Customer Value Hierarchy
It goes without saying that you do not sell products or features - instead, you sell benefits. How will your product help the customer? What benefits will it provide? How will it make your customer’s life better, easier, more exciting, more affordable?
The problem is, however, that, nowadays, you can’t sell what they call a core product. For example, you won’t get far with a product that simply teaches customers the basics of SEO or copywriting, simply because there are hundreds of similar e-books out there that all accomplish the same thing. To be successful, you will need to extend your product by adding new benefits to it - for instance, regular customer support, rarely explained strategies to drive more traffic to your site, exclusive members-only forum, etc. If you’re thinking product differentiation, then you’re not far off.
When differentiating yourself from the competition, however, you need to do so in an intelligent manner that emphasises points of key relevance to the customers. And that’s where a customer value hierarchy comes into play. Put simply, the hierarchy enables you to determine which of the benefits of are the really important ones. For example, if you are writing an e-book on SEO, the single most important benefit will also be the core benefit - that being, knowledge of how to optimize your site. But your second most important one may well a technical explanation of how to make changes to your code necessary to implement proper SEO practices (as you probably know, a lot of people are scared stiff by the very notion of fiddling around with HTML code).
In contrast, let’s assume your SEO e-book comes with a professionally illustrated, colorful e-cover. How much benefit do you reckon it will provide to your customers? The answer is - not a whole lot. While it’s nice to buy a product that you feel a lot of effort has gone into and that you can easily form a visual impression of, in the final analysis, this “feel-good” benefit is likely to be somewhere at the very bottom of the customer value hierarchy.
What does this mean for you as a marketer? Once you have constructed the customer value hierarchy for your product, you are in a much better position to write sales copy that will sell like hot cakes. You know exactly which points you need to stress the most, and which you can pretty much ignore or mention somewhere closer to the bottom of your copy. Properly-constructed customer value hierarchy pretty much writes the sales copy for you by helping you decide which of the benefits will help you sell the product - and which ones the prospective customer wouldn’t care one bit about.
This is a well-explained post about selling a product. Unfortunately, most Internet marketers (old and new) think that any product can sell especially if it is hot. They tend to forget that a product is only being bought by the ones who really need them.
These days, online buyers are getting smarter. They are sick and tired of reading the same old stuff especially about making money online.
Although I believe that quality content is still the king, the function of the product is the one that count most. If an ebook is about making money online, buyers should really be able to make money from that ebook.
Rich,
I couldn’t agree with you more! Nowadays, we’re getting swarmed with products that just don’t deliver, because they’re usually filled with the same old stuff that you’ve probably already heard of.
The odd thing is, I have yet to come across one product that actually made anyone as much money as was advertised in the sales letter. I guess it’s no wonder that we’ve started seeing a lot of earnings disclaimers for most serious products out there.
Once again, only the most thought-out of advice coming from you on this blog, George.
It’s really interesting to see how you laid out this entire Customer Value Hierarchy deal, as it’s something I definitely wasn’t aware about before. I’m very curious to learn more about, and how I can incorporate aspects of the theory into my business.
Keep us posted!
Tushar,
Thanks for dropping by! In one of the upcoming posts, I’m going to go a bit more into detail on how to construct CVH, because, in the final analysis, that’s just one of the things you need to get 100% right to write sizzling-hot copy.
I should email you about it.
Customer value hierarchy is a way to view customer value. It suggests a hierarchical representation of how customers view products, and how products relate to customers. The hierarchy of customer value is a pyramid with basic customer value at it base followed by expected, desired and unanticipated levels building off the base. A successful business should establish value beyond customer satisfaction and move to the desired levels of value. In planning its market offering, the marketer needs to address five products levels that add customer value and constitute a customer value hierarchy.
The five levels are listed and described in the following paragraphs.
First is Core Benefit. This idea is concerned with the fundamental need and benefits the customer really wants to buy. It is a want that is meant to satisfy consumers by consuming the products. An example of the core benefit would be buying a car and traveling from one place to another.
Second is basic product. This is a version of the products containing characteristics necessary for it functions. The marketer must turn the core benefit into the basic product. The brand and the design of the car would be the basic product.
Third is expected product. This is what the customer expects and agrees to when he or she buys a product. A car can run longer, which would make meet the customer expectations of the product.
Fourth is the augmented product. This is when additional benefits or related services that exceed customer expectation, and differentiate the product from its competitors. It is the non-physical part of the product that usually consists of a lot of added value. The warranty is the augmented product for a car buyer would be a good example of augmented product.
Fifth and final is potential product. This is looking for all the augmentations and transformations a product might undergo in the future. A car may run more smoothly.
References
Keller, Kevin Lane. 2003. Strategic Brand Management: Building, Measuring, and Managing
Kotler, F. Keller, K. (2009). Marketing Management. Pearson one
Keller, K (1998) Strategic Brand Management, Building, measuring and managing brand equity, Kogan Page, London