The other night I was lying awake, semi-regretting my recent purchase at a local coffeehouse of a really pricey fancy-pants espresso order. I found myself justifying the expense by telling myself that, A: I had just injected money into the local economy, B: I was supporting the young owners who are just starting out in business, C: I’ll make more lattes at home which will cut down on my greenhouse emissions…and I was struck by a thought:
Spending money ain’t what it used to be. There’s a lot more at stake nowadays. Low prices aren’t the end-all, be-all anymore. And companies need to be aware of this as they seek to connect with customers.
Here’s what I mean by that.
A few years ago, we all fell into an economic sinkhole. We are well into a statistical post-recession recovery, but customers aren’t spending the way a lot of our clients need them to be. Clearly the wounds are still fresh for consumers. But I think it’s equally clear that something fundamental changed on our collective way out of that sinkhole.
It all has to do with an updated definition of “value.”
Thirty years ago, “value” more or less meant that your toaster cost less than a TV, and that it wouldn’t stop working three weeks after you bought it. Purchases were utilitarian in nature – you make a financial outlay and receive a good or service. Simple. Clean. Easy to understand and quantify.
And while those basics are still true, the recession raised our shared awareness of the implications of purchase decisions both large and small. These days, people also care about what a purchase says about them. They want to know what they’re getting for their money, yes, but they also want to know what companies are going to do with that money. They want to know whether the companies are honorable and trustworthy - because frankly, people often think otherwise.
You see evidence of this everywhere, both for better and for worse. The locavore movement puts faces with food – you feel good knowing that the zucchini you purchased from Jane’s Farm will help put her son through college.
At the opposite end of the spectrum, the Occupy Wall Street movement demonstrated the public’s willingness to scrutinize the financial sector, where decisions with huge economic implications were being made by a very insular group of people.
The upshot: People want to feel more in control of what their money does, both while they have it and after it leaves their hands.
This is the new meaning of “value.” Call it Value 2.0. And here’s the tricky part - Value 2.0 is not so much about price or affordability or non-exploding toasters. Value 2.0 is all about experience.
So what can companies do?
A lot of businesses say they want a “close” relationship with their customers. But I believe customers would rather first feel an honest relationship with a company. As a wonderful piece of marketing-speak has it, brands need to “open the kimono.” It’s from this place that companies can begin to deliver on Value 2.0.
How a business pursues that honest relationship and delivers Value 2.0 naturally depends on the business. But thankfully, we all have a few tools at our fingertips that can help. Social platforms and content-driven storytelling just to name two.
Of course, we cannot simply encourage customers to use these tools to interact with a brand. Companies must be actively engaged in a two-way conversation, using these same tools to put themselves, their story and their people out there (“Here’s @earl, celebrating 30 years on the shop floor!”) as a way of giving themselves a real, tangible personality. And ultimately, letting their customers know who they’re really dealing with.
This is just the beginning. Going forward, customers are going to be scrutinizing companies even more closely, and companies need to prepare for that. Because for the foreseeable future, when someone has a choice between a company they understand and one that they have questions about, the honest, transparent operation will win every time.
And this is good news! Companies with a story to tell and a business to be proud of should welcome the era of Value 2.0 and see it for what it is – an opportunity to thrive. And the rest of us should see it as a chance to feel better about whatever we buy, and to sleep a little more soundly after we’ve bought it.
Liz Van Lenten is group director of the brand marketing practice at Ogilvy Chicago