the triumph of human values
winter 2002
vol. 2, no. 2
So, what’s going on here? Our research
uncovered three key megatrends:
Societal devolution. Historically, people
have found reinforcement of their
personal values in family, government,
their marriages, school, social-club
membership, and the church. But our trust
in government has been slowly eroding;
organised religion has lost its monopoly on
the moral high ground; and the quality of
education has slipped.
The upshot is that traditional
institutions have become less able to
adequately reflect human values. As a
result, consumers will respond to and
reward those commercial institutions
which offer reinforcement of their
personal values.
Increased inability to keep pace with daily life.
The triumph of human values
© ecr
journal
If you think consumers are looking for the lowest prices, the bestquality products, and lots of value-added
services from their shopping experiences,
you’re wrong.
In fact, what they’re searching for is
very different. Today’s consumers are
seeking something more akin to human
values, rather than just product/service
value from their commercial transactions.
This new consumer need set was
identified during research conducted by
Cap Gemini Ernst & Young over the past
three years in which more than 16,000
consumers in the United States and nine
European countries were asked about their
shopping experiences and their
relationships with business.
And over and over again, our survey
respondents around the globe pointed to
the importance of human qualities or
values – such as honesty, respect, dignity,
trust and fairness – surrounding their
transactions.
70
barcelona summary
by Fred Crawford
Boston, USA
Familiar language can fool us
into thinking we understand
something, when it is changing
in subtle ways. It’s time to
look afresh at what consumers
say they want
Modern consumers are searching for more than
good products, good services and low prices.
Increasingly, they’re looking for human values
the triumph of human values
winter 2002
Let’s look at the first myth. Our research
makes it clear that businesses and
consumers these days are speaking two
very different languages. While the five
basic attributes of all commercial
transactions – access, experience, price,
product and service – have remained
constant over time, the specific meaning
associated with them in the minds of
consumers has changed radically, a fact
that most businesses have failed to
understand.
Consumers told us that:
• price no longer means “lowest” but
rather “fair and honest”
• consistently good product is more
important than the “best” product
• service means “walking your talk”.
Consumers say special services mean
nothing if a company doesn’t
vol. 2, no. 2
The myths of excellence
Our consumer research led us to identify
two “myths of excellence” which
companies must understand in order to
thrive in this changing environment:
• that most businesses understand what
their customers really want
• that attempting to be great on all
aspects of customer engagement is the
way to win.
journal
meet the new lifestyle needs of consumers
in order to remain relevant in the
marketplace.
© ecr
Most of the consumers we talked to
complained about the time-pressure, stress
and feelings of guilt under which they
lived and worked.
In their dealings with businesses, they
are searching for ease and simplicity to
help them survive psychologically and
emotionally.
Explosion of increasingly intrusive information
and communication technologies. While
technology has introduced many positive
changes, it has also brought with it a sense
of information overload. Consumers today
are increasingly informed and aware, but
at the same time, they have become more
cynical and confused by the volume of
available – and often conflicting –
information.
As a result, they will respond to those
companies that help clarify their options
and make them feel satisfied with their
choices.
These three converging trends have
created a world in which consumers crave
clarity, ease, certainty and
trustworthiness. As a result of the
increasing complexities in their daily
lives, consumers no longer fit neatly into
marketing segments, but are
“instaviduals” who jump between many
segments during the week, and even
during the course of the day.
These new dynamics make longaccepted marketing techniques obsolete,
leaving many executives struggling to
71
the triumph of human values
successfully fulfil basic, everyday
requests
• access is more about ease and simplicity
of internal navigation than it is about
geographic location
• the real meaning of experience has
nothing to do with entertainment and
everything to do with being treated
with respect and dignity.
winter 2002
The importance of human values versus
product/service value came through loud
and clear in both Europe and the US, with
consumers identifying factors such as
courteous and respectful employees,
consistent product quality, easy returns,
fair and honest prices, and hassle-free
© ecr
journal
vol. 2, no. 2
The findings of our consumer research may come as a
surprise to anyone who thinks that the best-quality
products, the lowest prices and a bevy of value-added
services are the most important factors to shoppers.
The research makes clear that the traditional
method of appealing to consumers solely through
features and functions no longer meets the needs of
today’s consumers. Respondents in Europe confirmed
our earlier US research by pointing to more
humanistic, values-oriented factors such as courteous
and respectful employees and consistently goodquality product.
It is interesting to note that the top five overall
responses in Europe mirrored those in the United
States, with a slight difference in rank order.
72
Exhibit 1:
Europe – Top 5 Responses
% saying
'extremely
important'
The store is clean and well-maintained 71%
Employees are courteous and respectful 69%
Fred Crawford is
Executive Vice President,
Cap Gemini Ernst & Young
The retailer provides consistently good 67%
merchandise quality
The price is easily visible, the price is
64%
well marked
You can unconditionally return merchan- 60%
dise with which you are unhappy
Source: Cap Gemini Ernst & Young, 2002
shopping as keys to their shopping
satisfaction.
For instance, in Europe, almost 60 per
cent of consumers indicated that “honest
prices” were extremely important,
compared with just 38 per cent who
identified “lowest price” as extremely
important.
Similarly in the US, the importance of
honest prices far outweighed lowest price.
And in the area of product, “consistently
good merchandise quality” ranked at the
top of the list in Europe and the US. By
comparison, “top-quality products” was
rated as significantly less important.
When we asked consumers to name the
most important values to them as
individuals, as well as those they look for
in businesses, honesty was the
overwhelming winner in both respects.
This was true whether the consumers
resided in the US, the UK, the
Netherlands, France, Norway, Spain or any
of the other countries we studied.
Also high on the list were respect and
trust. It should come as no surprise that
honesty ranked highest, since it can be
viewed as a precursor to all other values –
table stakes in the game of business, if you
will.
Based on our research, it’s evident that
there is indeed a “global consumer” in the
sense that people throughout many of the
world’s major industrial economies today
are looking for the same basic human
United States – Top 5 Responses
% saying
'extremely
important'
Employees are courteous and respectful
The retailer provides consistently good
merchandise quality
You can unconditionally return merchandise with which you are unhappy
The store is clean and well-maintained
73%
70%
The price is easily visible, the price is
well marked
69%
69%
68%
Exhibit 2:
A new business model: the Consumer Relevancy framework
Access
Experience
Price
Product
Service
If a business
dominates on
this attribute, it...
Provides a
solution
Provides
individual
intimacy
Is the pricing
authority
Generates
inspiration
for customers
Provides
customisation
of products
and services
...and customers
seek the business
If a business
differentiates
itself on this
attribute, it...
Provides
convenience
Engenders care
for the customer
Is consistent
in its pricing
Generates
reliability
for customers
Provides
education
for customers
...and customers
prefer the business
If a business
operates at
industry par on
this attribute, it...
Provides ease
Engenders
respect for the
customer
Is honest in
its pricing
Generates
credibility
with customers
Provides for
...and customers
accommodation of accept the business
customers’ needs
Source: Cap Gemini Ernst & Young, 2002
the triumph of human values
winter 2002
vol. 2, no. 2
A new model to drive strategy and growth
But how does a company go about doing
that?
To help answer this critical question, we
developed a new model for corporate
success known as Consumer Relevancy sm.
Consumer Relevancy provides a company
with the ability to see business through
customers’ eyes and conduct business on
terms which customers find meaningful
on a personal level.
Consumer Relevancy also debunks the
second myth of excellence identified in our
research. The truth is that companies
needn’t – and, in fact, shouldn’t – try to be
great at everything.
Because most businesses focus on
increasing the value of a transaction
rather than worrying about the values
surrounding it, they almost intuitively
adopt strategies aimed at becoming the
best at every aspect of a transaction. This
approach leads to a significant overinvestment and a lack of enterprise focus,
journal
How do you apply Consumer Relevancy? First, ask
yourself whether your business is currently
operating at industry par in all five of the attribute
areas based on the framework shown below.
If the answer is no, you must first lift those
attributes to a level that meets the marketplace.
Then it’s time to consider on which attributes to
dominate and differentiate. If you aren’t sure, ask
your customers. If they’re anything like the
consumers we spoke to during our research, they’ll
be happy to tell you.
studied, the positioning of retailers in the
marketplace was unclear to consumers.
What’s more, the majority of consumers
could not identify their favorite stores in
many retail channels. These findings
indicate that a substantial opportunity
exists for companies to gain the loyalty of
these disenchanted consumers if they can
clarify their image and positioning and
understand what consumers really want.
© ecr
values to be reflected in the companies
with which they do business.
At the same time, however, it’s also true
that this new global consumer has many
different accents, as demonstrated by some
of the regional differences uncovered in
the research. For example, consumers in
Finland, Norway and Sweden put
particular emphasis on the importance of
being treated as valued customers. In
contrast, consumers in Germany, the
Netherlands and the UK place special
importance on the ability to return
products unconditionally. And consumers
in France, Italy and Spain were especially
concerned about the “ease” of shopping.
Our research also found that companies
are generally not well differentiated in the
minds of consumers in terms of their value
propositions. For instance, in country
after country, across most channels
73
journal
vol. 2, no. 2
winter 2002
the triumph of human values
which in turn confuses and alienates
customers.
Consumer Relevancy offers an
alternative business model. Rather than
striving for universal excellence,
companies should select one of the five
commercial attributes on which to
dominate, and one on which to
differentiate themselves, while ensuring
they are at par or meeting the market on
the remaining three.
Consumer Relevancy provides the basic
go-to-market strategy and conceptual
foundation for competitive positioning
around human values as they relate to
these attributes.
Companies which practice Consumer
Relevancy emphasise the context
surrounding their offering – the way in
which they deliver the product or service –
as much as the content of the offering –
the product or service itself. Evidence
demonstrates that balancing content and
context yields superior business results.
© ecr
To illustrate how Consumer Relevancy is reflected in
the real world, we have placed leading consumer
companies and brands from around the globe at
intersections on this matrix based on the primary and
secondary attributes on which the businesses operate.
While you can argue the specifics of particular
placements, the grid demonstrates the power of the
framework in defining competitive positioning.
74
Exhibit 3:
Consider successful companies such as
Aldi, Carrefour, Wal-Mart, McDonald’s,
Boots and Starbucks, all of which have
achieved balanced differentiation based on
both content and context.
Such an approach helps drive growth
through a focused and relevant strategy. As
part of the Consumer Relevancy model, a
numerical value is assigned to each of the
attributes.
These values represent a company’s
allocation of resources and operational
efforts to achieve either a threshold level
of acceptance at which it seeks to meet
market competition on an attribute (a
score of 3); a level of differentiation where
the company uses an attribute to persuade
consumers to prefer its products or services
(4); or a level of market dominance where
the consumer actively seeks out the
company (5).
A perfect score is 5, 4, 3, 3, 3,
representing dominance on one primary
attribute, differentiation on a secondary
attribute and parity on the remaining
three.
But a strategy alone is not enough. To
operationalise Consumer Relevancy, a
company must infuse its entire business
model with the focus and philosophy of its
chosen strategic framework. We call this
Customer-Driven TransformationSM (CDT), a
process which rapidly identifies missioncritical business capabilities, effectively
channels IT expenditures, and implements
Consumer relevancy in practice
Attributes
Price
Price
Service
Product
Experience
Access
Lands’ End, Geico
Yves Rocher,
Décathlon, Boots,
B&Q, Next, Target
Gateway, Ikea,
Club Med,
Southwest Airlines
Tim Horton’s,
Intermarché, Tide,
Avon, Aldeasa
Sephora, Galeries Lafayette,
FNAC, El Corte Inglés,
Marks & Spencer (food),
Gruppo Lombardin
Kraft, Virgin,
Peapod (Ahold)
McDonald’s, Gerber,
Statoil, Detaljhandel
BMW, Nike Stores,
Albert Heijn,
Bewley’s, Harrods
Carrefour, Casino,
Amazon, Coca-Cola,
Real, Coop (italy),
Divani & Divani
Service
AutoZone,
Saturn, Tesco
Product
Giant Tiger, Leader Price,
Walmart, Aldi, Lidl,
Prisma, Deichmann/
Roland, H&M
Chevy Truck,
Continental Airlines,
Citibank, Superquinn
Experience
Honda Gold Wing
Motorcycles
Holt Renfrew,
Nordstrom,
Singapore Airways
Loblaws, Bose, Tumi,
Best Buy, Pier 1, Tylenol
Access
Visa, C&A, Dollar
General, Rema 1000
Dell Computer,
American Express,
K-rauta
Canadian Tire, Frito-Lay,
Åhlens, Hema, Lowes
Source: Cap Gemini Ernst & Young, 2002
AOL, Hallmark
Second Cup,
Marlboro, Starbucks
the triumph of human values
winter 2002
vol. 2, no. 2
The bottom line for business is at once both
simple and profound – focus on the things
that make you great while understanding
you can’t be great at everything, and learn
to speak the new language of consumers.
journal
Implications for businesses
It is apparent that today’s changing
landscape has resulted in an opportunity
which has been missed by most businesses.
Consumer Relevancy allows companies to
take advantage of this opportunity and
provides a new avenue for a business to
enhance its competitive positioning,
differentiate itself in the marketplace, and
drive growth and profitability by building
a meaningful and focused value
proposition.
Herein lies the potential for businesses
to change the commercial game for the
mutual benefit of their customers and
themselves. As one of the consumers we
interviewed said, “I can find value
everywhere. I can’t find values anywhere”.
The insights garnered during the course
of our consumer research should lead
companies to ask several key questions
about the strategic framework that
underpins their business:
• is your company differentiated in the
minds of consumers in a way that truly
matters to them?
• do consumers understand and care
about your brand position in the same
way you do?
• can a consumer easily articulate the
difference between your brand and
those of your competitors?
• do all of your senior executives agree on
your brand position and those of your
key competitors?
• do all your employees understand your
brand position and their role in
supporting it?
• are all of your business processes and
performance metrics aligned to deliver
the brand promise effectively and
efficiently?
© ecr
operational improvements, resulting in
better alignment of a company’s business
operations and IT applications with its
core strategy.
This process allows companies to
determine whether they are spending
money on areas that don’t support their
core business strategy or are overspending
on areas that do not add to their point of
differentiation.
As a result, companies are able to
perform better against financial
expectations, boost profitability, and
strengthen their competitive position in
the marketplace.
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Further reading
The Myth Of Excellence: Why Great Companies
Never Try To Be The Best At Everything, by Fred
Crawford and Ryan Mathews, published by
Crown Business.
Consumers want access, experience, price, product
and service. But no company can excel at all five at
the same time. So focus on what makes you great