What is value in the context of a person’s relationship with a brand?
Updated: Oct 24, 2018
A brand’s part in any given person’s life is very small, relatively to all the other things that make up this person’s life. Having said that, if we focus on that little part, we’ll find that its a universe in itself. Every interaction between a person and something that is in some way related to the brand, is one ingredient in the, oh so complicated, Person-Brand relationship.
A billboard, a conversation with customer service rep, a dinner conversation with friends about something that has to do with the brand, waiting in line at the store… these are all parts of that relationship. If we designate the person-brand relationship as “The customer experience”, then we can also refer to all the points of contact between the Two, as segments in the continuum called “The continuous customer experience”.
The Person-Brand relationship can exist only when both parties are interested in deriving some sort of utility. In order to analyze this, I would like to refer you to my own version of the “Win Win” law:
“An interaction between Two parties will yield the greatest overall value when the perceived benefit of each of the parties, from the interaction, is maximal.”
This actually means that, in the person-brand relationship, the only way to maximize the brand’s target function, is by maximizing the person’s target function. Namely, if the company’s target function is defined in terms of profit, and the person’s target function is defined in terms of savings, self esteem, quality of service etc., then the only way to maximize the profits, is by maximizing all of the person’s perceived values, all of the time.
This is nothing new. It’s clear that when a person goes to buy a shirt, we see to it that we have a fashionable collection, a wide variety, various sizes, excellent service staff, attractive prices… But that’s just the shopping experience. What about the whole continuum of experiences? What if that evening there is news item about the company’s mistreatment of its employees? What if, on her way home, the person sees the same shirt, in a different store, for a lesser price? Maybe that person will not buy her next shirt from that company. And so it becomes clear that this company failed to derive the maximal value from its relationship with this person.
The bottom line is that it is essential to maximize the value from each of the experiences that form the Continuous Customer Experience, in order to derive the largest possible cumulative value, for the duration of the customer’s lifetime.With this we can now attempt to phrase the “Maximum Lifetime Value” law, as a derivative of the “Win Win” Law:
“An organization will succeed in deriving the maximal lifetime value, from a relationship with a customer, only if it is able to maximize that customer’s perceived value from each and every segment, in the Continuous Customer Experience”