DIGGING INTO VALUE IN 2024
Value is agreed, not absolute. So it can fluctuate with culture as much as our definition of beauty or our social codes. Times of change and uncertainty shift our beliefs and norms around what is of value.
The pandemic made us willing to spend more on home furnishings than holidays.
Econonmic downturns cause us to value small luxuries.
The internet made us think entertainment should be free, or at least cheap and bountiful.
We are at such an inflection point now: A global cost of living crisis, supply chain disruption, the proliferation of D2C brands and so on. These things exert pressure on our perception of value in a way that may well change everything for a long time to come. It can present a problem for your brand, or it can present an opportunity.
Value is a word with some pretty heavy baggage to marketers. It’s been misused to justify the kind of short termist discounting activity that can DEvalue a brand long-term. But brands can’t afford to avoid the question: How can we be of value in today’s context?
Businesses of course have to look at value from the inside out first: How much something cost to make; how much equity is in a brand, what the competitive landscape looks like and so on. But, as the world changes around us, we need to look at value from the otuside in as well.
We need a more holistic picture of the value equation, reflecting of the complexities of the decisions people must go through to individually evaluate, and collectively agree upon what something is worth. Because only once we have that can we look at all of the cultural forces influencing it and make sure a brand is of value in today’s world.
For example:
In a world where space, time and attention feel scarce, people are thinking about space cost, time cost, cognitive cost.
After the collective experience of the pandemic, and the intensifying of climate-related extreme weather, we aren’t just considering personal cost, but the broader cost to others and our environment.
We obviously need someone like McKinsey to do a massive study on this please, but in the absence of that I’d love to see more brands asking this question in their own research in 2024: How can we be valuable to people in today’s context?
Here’s my highly unscientific stab in the dark…
Original value equation: Value = (quality + service) / price
New value equation: Value = (quality + service + personal positive impacts + collective positive impacts) / (monetary cost + personal negative impacts + collective negative impacts)
Personal positive impacts: Does it save me time, make me feel good, help me sleep better, etc? How am I better off if I buy it?
Collective positive impacts: Does it contribute something to other people and/or planet. Is the world better off if I buy it?
Personal negative impacts: Do I have to get rid of something to make space for it, or stop doing something to afford it, or work harder to afford it, etc? What sacrifices to I need to make to buy it?
Collective negative impacts: Who or what does this negatively impact - the environment, the worker etc? Who or what pays a price if I buy it?
Once we understand the value equation around a category in a more holisitc way, we can start to keep an eye on how it’s shifting over time and what’s influencing it, big and small…
If culture is telling us to prioritise our free time and mental health, we’re not going to be willing to work more to buy the thing.
If we’re deep in a Vinted obsession, we’re training our brain to value the discontinued.
If our newsfeed is full of disaster, we might become more practical in our preferences.
We must start by assuming everyones decisions make sense - that they aren’t irrational or unpredictable, but that our questions and models are too narrow to see how they make sense. Then we can start building out a more expansive picture of what people value, how that is being influenced by culture, and where our brand might be of value.
Question 1: What’s your audience’s value equation for your brand and category?
Question 2: What are the cultural forces influencing that?
Question 3: How can your brand be of value in this context?