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Improving Brand Value

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Journal

Authors: Heinonen, K; Campbell, C. and Ferguson, S. L.

Journal: Strategies for creating value through individual and collective customer experiences. Business Horizons (2019) 62, 95-104.

Reviewer

Dr. Luciano Thome e Castro, Clinical Associate Professor

Summary

This article presents a conceptual model of customer value formation. This model rests on two dimensions, namely whether value is formed in the customer or provider domain and whether the value is individual or collective in nature. It challenges companies to consider customer context outside of customer-firm interactions as important sources of value creation for customers.

Things to consider

Value is defined by the classic “what I get for what I give.” It is a trade-off between what a customer has to sacrifice in order to receive one or more benefits from a supplier. These benefits generally include perceived quality and other abstractions, while sacrifices include both monetary and non-monetary prices such as time, effort and energy.

Such an easy and straight-forward definition may hide richer and more complete pillars of value formation and the different ways customers may experience value. Furthermore, it’s important to understand where and how value is created.

Common sense tells us that value creation is something a supplier creates and offers to a customer. However, value may also be created in the domain of the customer without control or interference from suppliers. Consumers can experience value based on individual experiences, or collectively through interaction with other customers.

A great example that combines collective value experience with some interference from a supplier is Harley Davidson customer communities. Harley Davidson owners derive brand value from the social interaction they have with other Harley Davidson owners. One may think the company might try to influence or interfere, but this is often not the case. If it were, the approach would not be genuine, and being genuine is a fundamental characteristic of any customer group in order to be effective and add value to the group as a whole.

Harley creates the atmosphere for this to happen. For instance, they host weekend meetings and propose trips. In doing so, what they are actually offering is a hub, and Harley owners are the ones making this hub an energized reality.

Another example is IKEA, but in a situation with no supplier interference. Ikeahackers.net is a brand community intended to re-significate IKEA furniture. Actually, Ikea has unsuccessfully attempted to end the initiative. The group has its own life and is totally unsupported by IKEA, but it creates value for IKEA customers.

What this means for Food and Agricultural Business

In the agribusiness world, customers join groups for many different reasons. These groups range from producer and industry professional associations to ag-practice oriented groups like no-till and organic farming. Recently, groups have also centered around topics such as women and next generation farming. Communities such as these have multiplied considering online reality, and a great deal of these group activities may even take place over the internet. The question now becomes: how should agribusiness firms interact with these groups and leverage them to strengthen their brand?

An example from the Brazilian unit of BASF is the sponsorship from a group of agronomic experts around a platform called Digilab. Using the Digilab platform and its mobile application, ag-experts could take pictures of crop diseases and weeds, share comments with other experts, ask for advice and offer opinions. Digilab was the venue—the hub—where agronomic experts could interact amongst each other. All BASF did was create the platform and structure. The customer, in this case a fundamental and powerful influencer to producers, was the one creating value on their own.

Important recommendations to consider when creating and interacting with customer groups both on- and off-line include:

  • Understand the community and its individuals
  • Support member citizenship
  • Enable both individual and collective experiences
  • Create a balance between anonymity and transparency
  • Support member-to-member interaction
  • Engage members in social competitions and events
  • Influence in moderation

Important questions to ask before starting to create or interact with these groups include:

  • What current groups already exist in your customers’ world?
  • What kind of value do customers extract from participating in a group’s activities?
  • What new groups and sources of value could exist?
  • What could be the sponsorship role of these initiatives?

Creativity should play a vast role in thinking about how companies can add value to already established groups and the development of new ones.