Bain research has identified the most important things that businesses value when consuming business services and products and have codified those in the Elements of Value. Lori Sherer, a partner with Bain’s Advanced Analytics practice, discusses how two companies used data and analytics to enhance the value of their services.
Read the article: The B2B Elements of Value (HBR.org)
Related video: Eric Almquist on the Elements of Value for B2B Companies
Read the transcript below.
LORI SHERER: In 2016, Bain & Company undertook some research with consumers, where we were able to codify elements of value starting with functional elements—does the product work, do I like it, etcetera—all the way up to aspirational and motivational elements. This year, we've done similar research on business to business. Can we actually codify that there are elements of value that businesses perceive in consuming business services and products?
And in fact, what we found is a very similar pattern to what we found on the consumer side, that at the bottom rung there are economic and performance characteristics that businesses perceive value from. But, many companies are actually adding value and avoiding commodity status of their products by adding value in the relationship dimensions and the intangible types of value. And in fact, some companies hit on elements of value, such as it motivates me, it inspires me and I feel like doing business with this company is socially responsible.
In my practice, I work with data and analytics, and help companies use data and analytics to try to enhance the value of their services. So data and analytics can really be very effective in actually bringing forth expertise, informing, making business easier to do, etcetera. One example of this is a company called Orica, in Australia. Orica is the world's largest producer of blasting materials for the mining industry.
A couple of years ago they took all of the engineering data that they have, from working with customers over decades, and they've digitized that data. And they've added to the data external information about climate patterns and geological data, etcetera. So, now they have a product called Blast IQ, where a mining engineer can actually log into the system and put in the parameters of what they're trying to achieve, and the system will recommend the exact amount of which types of products to use. Now, this is actually taking a product, which some people might consider a commodity, and making it much more usable and producing much better results by adding these predictive models to the data that they have on what works.
A second example where we've seen this is in agriculture. Monsanto, which is the world's largest producer of fertilizer and seeds, bought a company called The Climate Corp. a couple of years ago and added that to their service offerings. The Climate Corp. has been testing various farming techniques, using sensing devices in the soil and using climate data, and building predictive models. This is a great example of elements of value, because this company is using its data and its analytics to provide expertise to their customers in a way that is self-service and on demand.
With 40 distinct kinds of value, B2B managers can identify what matters most to each set of important stakeholders.
B2B companies can use the elements of value as a compass when deciding where to add value to their propositions.
What do customers want? Bain's Elements of Value® represent the deeper aspirations behind the purchasing decisions of B2B and B2C customers. Our insights explore the ways companies can go beyond price to offer more value.