The B2B Elements of Value


This article originally appeared in Harvard Business Review (subscription may be required).

It’s Saturday, and a chief operating officer who last week negotiated a multimillion-dollar deal for a fleet of vehicles for her company is feeling pretty good. To reward herself, she’s shopping for a convertible sports car to enjoy on weekends. Surely the price-value calculation she makes for a fun personal purchase is different from the one she made when negotiating at work, right?

Maybe those two calculations are not all that different. Her fleet decision obviously included objective criteria such as price, warranties, and service levels, but other, more subjective criteria figured in as well. For instance, the vehicles have to reflect the company’s brand. And their design and handling need to appeal to the employees who drive or ride in them, especially with the higher-end models for executives.

In reality, the differences between business-to-business and consumer decisions are not cut-and-dried. True, B2B sellers need to optimize prices, meet specifications, comply with regulations, and follow ethical practices. Procurement teams rigorously evaluate vendors and run total cost-of-ownership models to ensure that rational, quantifiable criteria around price and performance shape their analyses.

But today meeting those criteria is table stakes. As B2B offerings become ever more commoditized, the subjective, sometimes quite personal concerns that business customers bring to the purchase process are increasingly important. Indeed, our research shows that with some purchases, considerations such as whether a product can enhance the buyer’s reputation or reduce anxiety play a large role. Recognizing the full range of both rational and emotional factors behind business purchases—and tailoring the value proposition accordingly—is critical to avoiding the commodity trap.

To help B2B suppliers understand the spectrum of customer priorities, we analyzed scores of quantitative and qualitative customer studies that our firm had conducted for clients over three decades, examining what mattered most to buyers. From this research, we identified 40 fundamental “elements of value.” They fall into five categories: table stakes, functional, ease of doing business, individual, and inspirational.


Read the full article in the Harvard Business Review.

Explore the 40 B2B Elements of Value.