In a speech given at the University of Kansas on March 18, 1968, then U.S.-presidential candidate Robert F. Kennedy made a compelling case that measuring GDP was a strikingly limited metric of the country’s success. He explained how this one calculation falls short when he said,
“it measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country. It measures everything in short, except that which makes life worthwhile. And it can tell us everything about America except why we are proud that we are Americans.”
We can draw parallels from Kennedy’s view on GDP to how businesses look at a singular success metric like Return on Investment (ROI). ROI measures neither the ease of doing business, nor personal value, neither the community value a company delivers, nor employee satisfaction. ROI, in short, can tell us everything about the financial reasons to invest in a partner but not the total value of the relationship. Value is more than ROI.
To this end, Ecosystems’ partner Bain & Company, has introduced a more holistic structure to think of B2B Value:
The value pyramid categorizes the elements of customer value into the levels of a pyramid. As you move up the pyramid from functional elements like reducing effort or cost, to higher-order elements like providing hope or motivation, the customer weight on value increases. When a seller learns what their buyer’s higher level of values are — and delivers them — not only does their loyalty increase but so does repeat business.
Take, for example, HP’s bold initiative, which they announced in early 2019. HP went public with a vision for print sustainability by introducing innovation that helps protect the world’s forests, reduces carbon emissions, and uses more recycled materials. The company pledged that every page printed with HP will support a forest-positive future, carbon neutrality, and have been created with materials designed to reduce the negative impact on the planet. Built on the company’s long-standing commitment to environmental innovation, this announcement appeals to buyers on a higher element of value – that of social impact. Not surprisingly, HP has the highest industry-level renewal rates and is experiencing double-digit growth with strategic accounts.
By incorporating Bain & Company’s B2B Elements of Value research into the Ecosystem Platform, sellers now have the ability to deliver more value to customers, increase loyalty, and expand the number of repeat purchases. According to Bain’s research, a company that delivers six or more elements of value doubles the chance of repeat business and moves Net Promoter Scores (NPS) up dramatically.
Like the late Robert Kennedy, we are looking at success holistically and digging deeper to help clients expand their definition of value. All in pursuit of our company purpose – –Your value made clear.