Value is a difficult term to quantify as it has many interpretations. Fortunately, Eric Almquist, John Senior and Nicholas Bloch from Bain & Company have tackled this problem and published their findings in a recent issue of Harvard Business Review.
To summarize their research, they identified value as delivered a Maslow-inspired hierarchy of four needs; functional, emotional, life changing and social impact. Each need tier is further subdivided into value attributes that help provide clarity and definition to each need. The authors state that when these needs are combined they increase customer loyalty and drive revenue growth.
Let's apply this to the credit union space and review the value extended in an auto loan. Can an auto loan experience, save time, money and reduce cost? Yes. Can an auto loan increase attractiveness, wellness and reduce anxiety? Yes. But the key here is to show the benefit of the auto, and make certain the process of attaining it all provides value.
This only one example of value. The authors offered several methods to identify organizational value.
1. Motivate employees to hunt for value
Create a way for all departments to express how the credit union currently provides value to the member, and how it could in the future.
2. Structured listening
Externally survey both members and non-members about the value of the credit union.
3. Creating member-centric designed products
Test new value offerings with members via social media, Fidor does this via their “community.” The community is a Facebook-like section of the corporate website. It allows for bank users to make product suggestions, savings tips and interact with experts. This has created several great ideas as well as an incredible communication channel.
The authors suggest that value development and delivery to be a formal process specifically to new product development, pricing, and customer segmentation.
Here are questions that the authors suggest should be part of the value determination
Can we connect in a new way with members?
Can our members benefit from integration with other services such as mobile?
Can we add therapeutic value to our service?
While this is the perceived as the most important lever in demand management, consider how pricing changes will move a member around the value hierarchy.
it's clear that life stages offer many different needs. Reviewing segments from the value hierarchy perspective and then develop products and services that deliver those needs.
Add a value creation section to the annual business plan
This will give formality and accountability to this concept.
Value creation is something that credit unions do implement with every member interaction, now with this framework, it can be quantified as well as qualified.
So what are you waiting for? The value that can be given to members is only limited by your mind.