Changing the Way the World Thinks about Strategy
Customers' Dimensions of Value

Customers’ Dimensions of Value

Customers’ dimensions of value may be very different from ours

Customers don’t look at us – or our products and services – in the same way we do.  When we look at what we do, we see the effort, the difficulty, and the risk we put into everything.  The sum of the know-how we apply in our business hopefully translates into value for the customer.  This dimension of value, however, may be very different from the value we perceive from our side of the fence.

The difference, of course, comes from the fact that customers don’t make the product or provide the service.  Rather they simply use the product or service to enhance their lives or their businesses.  Therefore, this means that customer evaluations don’t always come from the INPUTS we see in creating value.  Customers tend to evaluate the OUTPUTS – or enhancements to their lives or businesses.

Let’s take a look at a service many people purchase frequently – a meal in a restaurant

The inputs include raw materials, capital equipment and real estate, labor and know-how.  Often, more intangible inputs such as marketing or decoration may be added to enhance the perception of value.   Yet what customers care about is the expectation that their life will be enhanced by eating a meal out.  The enhancement is the output – which we can think of in terms of the entire “package” the meal represents.

This enhancement can show up very differently for different customers.  Some customers care deeply about convenience, while others may seek the feeling that they are being catered to.  Others, however, may simply evaluate the quality and presentation of the dishes.  Each customer will bring a unique set of dimensions of value to their decision making process.  Specific decisions may change the dimensions, even for the same customer.  Take the example of a customer looking to grab lunch during the work day – convenience and speed may be important.  The same customer, when looking to impress someone important, may downplay that dimension in favor of luxury service and presentation.

So, with different customers having different dimensions of value, we have to remember that good strategy involves differentiation

Some customers’ dimensions of value may be inconsistent with others – meal presentation and convenience sometimes detract from each other.  Never the less, in a given situation, most customers perceive an ideal combination of dimensions of value that they seek.

How can we use this in our businesses?  In the restaurant example, your strategy should clearly identify types of customers that value the dimensions you deliver on.  Furthermore, you may want to examine the specific situations.   A restaurant that appeals to affluent consumers looking for a special meal needs luxery service, atmosphere, food quality and presentation.  Those same dimensions of value will work against you if you try to appeal to students grabbing lunch between classes.

What dimensions of value do your customers use in evaluating your offerings?  Do they change in different situations?  We’d love to hear examples of how this may define your markets and your differentiation.  Attend our seminar on Simplified Strategic Planning to learn more about markets and differentiation and other aspects of strategic planning.

Robert Bradford is President & CEO of the Center for Simplified Strategic Planning, Inc.  He can be reached at

M. Dana Baldwin is Senior Strategist with Center for Simplified Strategic Planning, Inc. He can be reached by email at:

For more about differentiation click here

Co-Author, M. Dana Baldwin

Robert Bradford

Co-Author, Robert Bradford

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