Deliver 5 Levels of Value | Team Member and Customer Experience Value


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Fairly early in my career, I was fortunate to happen upon customer value theories and research conducted by Professors Sheth, Newman, and Gross. In their book, Consumption Values and Market Choices – Theory and Application, these authors reviewed more than 200 studies on customer value. The book is a rich resource on what drives customer choice, ways to inquire about customer value and data analytic approaches to consumer preferences. I will highlight the core tenets of the theory expressed and tested by these researchers and outline five types of consumer value.

Sheth, Newman, and Gross suggest that:

  • Customers choose products and brands based on multiple dimensions of value
  • Each form of value has a variable role in decision making
  • Various types of consumer value are interdependent

So, what are the various forms of value that merge together to drive purchases? Here are five forms researched by Sheth, Newman, and Gross:

  • Functional
  • Social
  • Emotional
  • Epistemic
  • Conditional

I will provide a high-level overview of each.

Functional value is synonymous with “perceived utility.” Customers determine this value based on the capacity of a product to perform a function that improves their life. Functional value is what comes to mind when most people think of product or service value. What are the benefits or attributes of a product that make it worthy of purchase?

Social value is also called “status or identity” value. For example, the functional value of a Mercedes-Benz and a Mazda are similar (reliable transportation). However, the value proposition that causes a customer to choose one or the other of those brands at least partly is a function of social status and personal identity. My father, for example, identified as a Ford owner and viewed himself differently than those people who owned Chevrolets.

Emotional value involves the degree to which emotions are aroused when purchasing a product or service. Imagine having the choice to buy the same product from two different vendors. One of them leaves you feeling unimportant, and the other makes you feel special. All things being equal, the value of being “cared about” will contribute to your purchase decision.

Epistemic value is the same as curiosity or novelty value. This value proposition lures people with claims of being “new and improved” or “revolutionary.” Many innovative brands like Apple leverage novelty value to attract early adopters. Over time the novelty of a successful concept wears off and the offering becomes mainstream.

Conditional value is equivalent to situational value. For example, if you are walking in New York City and it begins raining, you will see a lot of vendors place umbrellas in their shop windows. Customers wouldn’t have been as interested in purchasing an umbrella absent the situational need.

Inspired by the research of Sheth, Newman, and Gross, here are three challenge questions for you this week:

  1. Which of these five forms of value have you built into your customer experience?
  2. All things being equal, which customer segments should choose you based on social value?
  3. All things being equal, what emotional value do you provide throughout your customers’ experience that your competitors do not?

In my recently released book Stronger Through Adversity, I talked to more than 140 global leaders about how they were driving multiple forms of value for a pandemic and post-pandemic world. I hope you’ll consider picking up a copy of my book and will download one of my complimentary eBooks, including one I just wrote about Stronger Through Adversity. You can do that by visiting

Republished with author's permission from original post.

Joseph Michelli, Ph.D.
Joseph Michelli, Ph.D., an organizational consultant and the chief experience officer of The Michelli Experience, authored The New Gold Standard: 5 Leadership Principles for Creating a Legendary Customer Experience Courtesy of The Ritz-Carlton Hotel Company and the best-selling The Starbucks Experience: 5 Principles for Turning Ordinary Into Extraordinary.


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