Mary Kate Eddy
Though we often focus immediately on revenue gain and cost reduction, emotional value tends to be overlooked even though it is a top priority to many of our clients.
Emotional value contains a lot of leverage that helps to improve standing with big bosses and helps us close deals. FitzMartin is a sales-first company that is driven by these things, and we want to pursue those. And we know that you do too.
So how do we define value? It is simply the evaluation of benefits divided by cost; values are derived from that. From a marketer’s point of view, the underlying concept of value is simply looking at what a consumer needs, wants, or demands.
Value is broken down into four segments: functional value, monetary value, social value and psychological value.
Adam Smith offers an interesting insight in his book, An Inquiry Into the Nature and Causes of the Wealth of Nations: “...The things that have the greatest value in use frequently have little or no value in exchange. On the contrary, those which have the greatest value in exchange frequently have little or no value in use. Nothing is more useful than water, but it can be purchased for scarcely anything. A diamond, on the contrary, has scarcely any use-value, but a great, very great quantity of other goods may frequently be had in exchange for it.” (This was obviously written before we could buy $5 of water.)
This thinking led to an exchange of value being determined by labor. The value triad states three ways we can offer value to a customer: revenue gain, cost reduction, and emotional contribution.
Emotional contribution is not as easily understood. Revenue gain and cost reduction are more tangible because they translate easily to money. Emotional contribution or emotional value, could translate to the customer’s past experience, the understanding of your brand, social power, product packaging, etc. Emotional contribution helps a purchaser have visible wins to senior leadership and move up in value at their companies. If you’re late in a deal and the prospect asks you to give more, don’t do it by reducing the price. Consider reducing the risk for the buyer instead.
To learn more on the importance of emotional value for clients check out a recent podcast on this topic here.