Tia Hall-Davis

The Meaning of Value has Changed for Consumers

Tia Hall-Davis
The Meaning of Value has Changed for Consumers

Earlier this year, Rapp set out to discover the meaning of value among UK consumers and identify the new ‘levers’ that brands need to pull to drive value perception among customers. The research findings suggest that the contemporary marketplace is very different to the one that faced brands only four years ago.

“Value is one of those terms that gets bandied around a lot by marketing departments,” says Shiona McDougall, senior vice-president of strategy at Rapp UK. “It often appears as a pillar in a brand strategy, or as part of strategic marketing objectives or principles. If you ask 10 people across 10 different organisations the meaning of value, you’ll get 10 different answers.”

This situation prompted Rapp to do some proprietary research into what value means to customers in 2016 – and how br ands can drive value perceptions – having previously carried out similar research in 2012.

“What we found, to our surprise, was that the meaning of value has fundamentally shifted and evolved over the past four years. In particular, we noted the emergence of three new key ‘levers’ of value for customers, which we identified as ‘choice’, ‘control’ and ‘community’.”

McDougall believes that the wider economic and cultural conditions have had a huge impact on perceptions of value. She says:

“Back in 2012, we were dealing with full-on austerity, and the world was much more short-term and transactional, with consumers behaving in more of a ‘hand-to-mouth’ fashion while coping with the effects of recession. Many brands subsequently altered their operational approach to deal with that shift, but very few are prepared for the latest evolution in value perception.

“With this latest research, we found a marked shift from the cost-conscious customer of 2012 and the austerity chic mindset of 2014 to the emergence of a new consumer in 2016 – a consumer looking to make a more confident, liberated choice.

“In the eyes of the consumer, value is no longer how much product you get and for what price. It’s a much more rounded proposition which brands need to start adapting to if they going to deliver a value exchange to their consumers that will have a real and meaningful impact on their business.”

The levers of value

Ben Golik, executive creative director at Rapp, believes that the volume of choice available to consumers has led to changing behaviours: “One of the phrases we use at Rapp a lot is that brands need people more than people need brands. The incredible range of choice available to consumer via the internet has put control firmly back into consumers’ hands.

“For example, our research revealed that discounts and deals have less of an impact on consumers than they did five years ago. Don’t get me wrong, they still work to an extent, but not the way they used to. Likewise, things like time-based urgency ‘sale must end’ style messaging is become far less effective. There’s a growing sense among consumers that I’ll make this decision on my own terms in my own time. That’s a very significant shift and any brand messaging that tries to lessen that control isn’t going down well any more.

“In response, brands need to learn to lean on the other levers for value, rather than continue to plough ahead with techniques that are likely to deliver ever-diminishing returns.”

Golik continues: “Our research also revealed the growing importance of community within marketing channels such as loyalty programmes. Today, loyalty is less about points and prizes, and much more about the opportunity to connect with like-minded communities, which in turn provide mutually beneficial information exchanges, increased fun or increased social currency.”

“Essentially, the relationship with the consumer is no longer on the brand’s terms. That means brands need to change how they market themselves.”

Customers in control

So, how exactly do brands go about handing control over to their customers?

Shiona McDougall says: “At Rapp, we don’t talk about CRM or customer relationship management – we talk about CMR, or customer-managed relationships.

“Our work within the healthcare industry is a perfect illustration of this. We’re developing patient support programmes that are designed to put the control of their relationship with the treatment brands and control over their condition and programme of treatment management back into the hands of the patient.”

Golik adds: “We’ve seen the commercial impact on other clients too: moving from selling to suggestions for one client, which has opened up ‘choice’ and increased sales by 227%.

“Brands are no longer able to ‘bribe’ their way into peoples’ lives. For us, that means we need to earn that right on behalf of our clients. We’re in the business of building long-term relationships and, interestingly for brands, that doesn’t necessarily mean spending a lot of money, but it does mean pulling on new leavers to develop a new deeper relationship with consumers based on choice, control and community.”

Ben Golik, Creative Director & Shiona McDougall, SVP Strategy. 

This was featured on The Drum