“Values” is one of the business world’s most repeated buzzwords. Corporate reports, news cycles, and investment strategies are responding to consumers’ desire to have purchases mean more than just dollars for a company’s bottom line.
But small business owners should be sensitive about the values they promote. Legacy national brands often guide changing business norms and practices. However, major companies like Disney, Southwest, and General Electric have the brand trust and well-funded communications teams to be resilient even if they miss the values mark. A small business often can’t afford an unforced brand error or to dilute its limited resources. This is especially true if the business relies heavily on community trust or building personal relationships.
There are two types of values which companies must consider. The first – such as honesty and transparency, good pay and safe work environments for staff, and ethical treatment of customers — are universal. The second are more political, such as non-profit donations.
But before both of these customer values is the reason to be in business: providing a product or service that people want to buy. Contrary to the popular consensus and many headlines, value to customers is more important than customer values.
Provide value to customers to maximize growth and minimize risk
The political values business model has proven hugely successful for some companies. There are firearm manufacturers which have seized market share because they explicitly tie themselves to conservative views on the Second Amendment. Conversely, some co-working spaces successfully brand themselves as “progressive.”
But these companies first have to have a product or service people want (value to customers). They also must represent universal values to retain staff and to keep customers coming back. Without these first two, the politics don’t matter. Additionally, the political growth model’s disproportionate media coverage doesn’t represent most business’ actual life cycles.
Consider how Starbucks went from being a seven-location coffee store to having almost 3,000 locations worldwide. Yes, Starbucks is often cited as a leading example of liberal corporate values. However, it became a market leader because its core value to customer is having an experience along with your coffee. It also created a brand around the universal value of heavily investing in its employees’ well-being. Politics came last, almost as a byproduct of who is their core target market.
The same is true for Chick-fil-A. Yes, it is perceived as being a socially conservative, political values company. But its success – grossing the most dollars per location in the fast-food industry – is based upon the value to customers of politeness with your food and the universal value of investing in employees’ well-being.
The best small businesses succeed the same way. A legal firm that provides top-level service (value to customers) and doesn’t nickel-and-dime the customer every six minutes (universal value) will build a brand for great service and great treatment. A roofing contractor’s leak-proof roof is a value to customers that is supplemented by taking care of your kids and pets by cleaning all the nails out of the yard.
A typical small business should prioritize value to customers and universal values to grow its market share for at least four reasons:
- Most people want great products or services to fulfill core needs. Values inherently come second even for services that have great elasticity, such as legal and financial services – nobody goes to a political values legal firm when they need a bank loan. Everyone goes to a trusted lender.
- Because most people seek to fulfill their need first, there is limited market space for political values companies. Greater market share is available by putting value to customers and universal values first.
- A small business’ resources are best used to create a great product or service and a strong company infrastructure. Diluting scarce resources to politics hurts your branding, business development, and other strategies for faster growth.
- Today’s political values may not be tomorrow’s values, so engaging in political values bears significant brand risk. Conversely, value to customers will always be relevant until an industry is extinct, and universal values will be important until people stop buying products and services.
Polling: Consumers have gone back to basics
Two national polls taken since the COVID-19 pandemic hit America’s shores prove that most 21st-century customers put value over values. First up are poll results published on December 8, 2020. Conducted by the research group McKinsey, the survey shows that the pandemic has changed common buying habits. The new habits are driven not by consumer values, but rather by value to consumers. Here are some key numbers:
- 76% of consumers have changed their shopping habits, and most will continue to do so after the pandemic subsides. Over 70 percent of Americans’ changed habits included buying from a different brand or from a different retailer, store, or website.
- One-third of Americans use a different goods seller primarily for convenience, the value of the goods, and availability.
- Value to consumers – as opposed to consumers’ values – also tops the list for why people are shopping for different brands.
These results lead to another look at the Summer 2020 Axios consumer poll. We’ve highlighted it before, but it bears bringing up again because “Industries with a prominent role in life under quarantine have seen especially big jumps” in consumer trust, wrote Axios co-founder Mike Allen.
Thirty-four thousand Americans told Axios that Clorox, supermarkets, and Amazon were among their Top 10 most-trusted corporations. These are well-established firms which consumers trusted believed provided value during the COVID-19 pandemic. UPS and Amazon literally delivered their way into consumers’ trust. Netflix was the go-to source for mental health breaks, and Zoom took care of the telecommunication needs of students and businesses. All of these companies provided value to customers, and earned customers’ trust, without engaging in politics.
Having the “right” values isn’t easy – so just provide great value
Some companies will successfully differentiate themselves with politics. Chick-fil-A and Starbucks have benefited from cultivating this strategy, but they have periodically stumbled with even their core customers. This is the risk of having politics tied to a company brand — it’s not easy to have the “right” values all the time. Therefore, we encourage small businesses to put the politics to one side and focus on what appeals to the vast majority of actual and potential customers: great service and products supported by universal values.