4 pillars of Value Creation

One of the trendy words nowadays on marketing is “value”, but what is value? It may be conceptualized as the relationship between the consumer‘s perceived benefits in relation to the perceived costs of receiving these benefits. It is often expressed as the equation:

Value= Benefit/Cost

If we apply simple math to it. Value can be bigger, smaller than 1, or simply 1. What does all this mean? If we have a product where the benefit is smaller than the cost, we will have a number between 0 and 1, meaning that product is overvalued or overestimated (risky bounds.) If the relationship is bigger than one, then the product undervalued or underestimated. (expensive bounds.) And if the the relationship is equal to 1 means that we have reach the sweet spot. Most of the companies try to be either around 1 or bigger than 1. The key here is to increase our value and tip the scale on our benefit.

Screen Shot 2014-04-24 at 6.19.32 PM

The 4 most common ways to add value to your company are:

  1. Products that perform: To develop a product that works. If you ask few Apple fans why they like it so much, they say… “because it works.”
  2. Exceed expectations: In order to reduce the cognitive dissonance, you need to be sure that you can pass the expectations that the customer has set when he decided to buy something from you. Nothing wrong with going the extra mile.
  3. Give guarantees: If it breaks: Turn the other cheek, answer the phone, replace the broken product, and give them a reason to comeback. This is your chance to turn a bad experience into a great one and increase the loyalty of your client.
  4. Build Relationships: Love your clients be a farmer, cultivate relationships with providers, clients and within your company.

If we follow this 4 simple rules, we can become on a stronger company, differentiation is huge! Learn from what the others are doing wrong and take advantage of that.
Aldous Huxley said “That men do not learn very much from the lessons of history is the most important of all the lessons of history.”

Thanks for reading and please don’t forget to follow my blog!




3 thoughts on “4 pillars of Value Creation

  1. I couldn’t agree more with this these pillars. Customers want to feel that you care, they want to feel touched. I recently had a problem with a product that I had bought from Wal-Mart and rather than returning it for store credit or cash back they said it had to be an exchange for the same product (awful). They should want to turn my bad experience into a good one like you say. Lastly, relationships are 100% necessary, you never know who you will be doing business with again in the future. Great post Ricardo


    1. Thanks Al! absolutely! Every time we screw up, is a huge opportunity to turn a customer into a devoted fan. Did you know that if someone recommends you to buy something there is more than 70% of chances that you will do? Huge, compared to 30% of effectiveness of advertising. Thanks for your comment,
      read you soon.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s