VALOR™ is designed to answer the following key business questions:
- What does “value” mean to customers?
- What specific elements
of brand performance really drive value perceptions among customers?
- For example, are people willing to accept slower service in
order to get a lower price? If so, then “quick service” is not a key determinant of what drives “value.”
- What actions and investments
will give us the biggest return in terms of increasing value perceptions for our brand?
The chart above illustrates how VALOR™ can
be used to target operational improvement efforts. In this example, a baseline for the client brand is set by running market simulations
where the client and all competitors are held constant at $11.99 with “perfect” performance across the task variables (in this restaurant
example, "Freshness" and "Quick Service").
Next, the client's price is varied along with the performance variables of “Freshness”
and “Quick Service” in order to determine the impact of failure on these variables, and the degree to which failure drives the % of
consumers who identify the client brand as the “best value" among a set of competitive brands.
This reveals that it is worse to fail
on “Freshness” than to fail on “Quick Service.” Operational efforts focused on maintaining and building consumer opinion of “Freshness”
provide a greater ROI in terms of customer value perceptions, compared to “Quick Service” (because of the greater protection against
Also, there is a threshold of $11.99, above which the market is even less tolerant of poor performance.
1) Determine the impact of the brand name on perceived value.
2) Determine the dollar differential in terms of “brand premium” or "brand discount" vs. competitors.
3) Quantify the degree to which core performance outcomes drive value perceptions.
What VALOR Does:
VALOR™ - Value Optimization Research
% Identifying Brand
As "Best Value"
Quality. Value. Speed. Pick Three.