“Marketing is the art of making someone want something you have”
– The Internet Nonprofit Center (1999)
Understanding consumer or client needs and values is key to making someone want what you have. This article provides a simple, practical approach to understanding what your client’s value.
For marketers, achieving a positive purchase decision depends on two actions; first, understanding the motivations that influence choice and secondly, establishing a unique, meaningful reason for choosing their product or service firm over the competition.
“Laddering”, an interesting research technique borrowed from consumer package goods, has recently surfaced in professional service firms. The technique provides the savvy marketers with the insight to distinguish their firms, influence choice, and ultimately increase profits. This article briefly describes the technique and how it can be applied to help you differentiate your firm.
Laddering is an in-depth probing technique based on a theoretical construct from behavioral sciences known as the “Means-End Theory.” The theory, first applied in marketing by Dichter in 1960, postulates that both tangible (physical) and intangible (psychological) characteristics influence purchase behavior. The theory claims that the link between attributes of a product or service and the clients’ (or consumers’) social or intangible needs or values predict choice (Illustration #1).
Illustration #1: The Attribute/Value Connection
|Features or characteristics which describe a
product or service (abstract or physical)
|Results accrued from avoiding or obtaining that attribute (Physiological or psychological)|
|End states or important beliefs people hold about
The model holds that consumers choose actions, which produce desired consequences and minimize undesired consequences.
Laddering is the term used to describe the interviewing technique employed to identify the links between the product or service attributes and purchaser values. The relationship or links can be graphically illustrated by benefit chains or hierarchical value maps (HVM).
How it works
The benefit chain, or HVM, is derived from a series of questions. The interviewer may start by eliciting the attributes that are sought or avoided (when soliciting an attorney or firm). This may be accomplished by using a variety of techniques:
- Respondent categorization (sort the firms using a variety of sort criteria)
- Triadic or Repertory Grid (identifies similarities and differences between sets of three)
- Preference consumption differences (what makes firm X more desirable)
- Situational differences (reasons for choosing for specific situation…litigation vs. transaction, etc.)
Through a series of techniques such as a triadic grid (example attached), attributes that are unique to your firm are also identified. A trained interviewer then asks a series of questions to determine why the attributes are important (desired and undesired consequences). Questioning continues until the underlying desired values or end-states are identified. A value is an “enduring belief that a specific mode of conduct or end-state of existence is personally or socially preferable to an opposite or converse mode of conduct or end-state existence. ” (Rokeach, 1968,1973)
Literature describes two kinds of values:
Terminal – Concerned with preferred end states of existence (happiness, security, accomplishment, control, self-esteem, companionship, intimacy, wisdom, freedom from conflict, etc.)
Instrumental – Related to modes of behavior (honest, courageous, broad- minded, successful parenting, nurturing, etc.)
Note: see Yeaton and Rokeach list of values attached
To illustrate the theory, I have included a hypothetical map illustrating the links one benefits manager might have for choosing an insurance company:
Illustration #2: Benefits Manager Sample Hypothetical Ladder
|Attribute:||Reputable (been around a long
|Many types of insurance
|Consequence:||Will be around in the futureDon’t have to change every year
Less time reselecting vendor
|Employees can chooseThey are happy
Boss is happy
|I don’t have the researchAllows me time to conduct analysis and save company $$|
|Allows me time to analyze and
make recommendations to management
|Value:||I am successful / I can
advance at work
Laddering can be particularly beneficial whenever complicated purchases, such as legal or financial services are involved.
Marketing Application: A Case Study
The following illustrates how Laddering helped to identify a creative strategy to assist Brink’s Home Security increase its share of market.
Ten years ago, Brink’s Home Security Service focused its advertising on tangible characteristics:
- “wired” or “unwired,”
- “monitored locally” or “monitored nationally,”
- “5 minute response time,” etc.
Competitors’ claims were virtually identical and were based only on product/services attributes. Brink’s president, Peter Michel, wanted to develop a value proposition that 1) distinguished its service from its competitors and 2) motivated action.
Approximately 40 In-depth Laddering surveys were conducted with customers in the Denver market. The findings of the research indicated that no matter what attributes were sought or avoided (wired, wireless, monitored remotely or locally, etc.), the benefit or consequence of those attributes was that a break-in would be thwarted. So why then were break-ins so important to avert? Popular belief at the time theorized that purchasers valued their possessions. The Laddering surveys showed that prospects were not concerned with the property loss. Instead they were concerned with providing a safe, secure home, free from violation. The resulting environment was safe and even nurturing and the decision-maker felt they were a good parent or spouse. Once this benefit chain, or “ladder,” was developed, the ad agency revamped the advertising to include the implied key message that with Brinks you and your family could rest easy, feeling safe and secure. Further, it tied into the psychological need for parents to fulfill this sense of responsibility for their families.
The new ads ran for 2-3 years and resulted in increased market share.
I applied this technique at Winstead to discover the attributes that differentiated Winstead and used the learning to create a Creative Strategy Brief, a document that served to direct all communications (PR strategies, advertising and to develop Winstead’s award-winning web site). Other applications for Laddering are highlighted below:
- Market Segmentation -A national bank identifies how product/service properties and consequences influence choice behavior for each business segment. The results are used for the bank’s national segmentation study.
- New Product Development – A major greeting card line manufacturer understands why consumers are motivated to purchase partyware from warehouse stores and uses the benefit chains to design a new line of products for their stores. This is how Hallmark moved form all matching partyware to mix and match, once they understood what motivated purchase and why, the mix and match strategy was born.
- Employee Reviews – A major hospital group identifies the attributes and benefits sought by interns and surgeons and finds that the ideal nurse and floor plans differs significantly. The findings are used to design evaluation forms and to direct future construction.
- Recruiting- A brokerage firm identifies the attribute-benefits chains most desired by successful stockbrokers and designs programs to attract and retain the top 5%. I also used this technique at Winstead to determine why associates decided to join the firm, and where possible, to understand why an attorney leaves the firm.
- Advertising / Positioning – a national accounting firm understands the motivations underlying choice and designs an ad campaign, which capitalized on CFO and CEO fears and aspirations, resulting in believable, motivating creative.
- Politics- Wirthlin Worldwide applied the technique during the Reagan/Bush presidential campaign in 1984; the technique is credited with identifying the creative that eventually linked
Reagan’s Star War’s Defense to peace, significantly influencing the election outcome. (See “Applying Laddering Data to Communications Strategy and Advertising Practice,” Journal of Advertising Research,July/August 1995).
Laddering, a simple interviewing process, can be a very effective marketing research technique and can help professional service firms identify and establish a meaningful point-of-difference and increase their share of wallet.
Triadic Grid Work Sheet#1
|Column #3||Column #4|
|Audi / BMW / Lexus|
|Audi /Saab / BMW|
|Lexus / BMW / Saab|
|Cadillac / Saab /BMW|
|BMW / Lexus / Ford|
Have respondents circle the one brand or firm in each group that is different. In column A record the attribute or characteristics that is shared by the two similar firms/brands. In column B respondents will record the attribute that distinguishes the one unique brand/firm.
List of Frequently Observed Values
- Fun/Excitement – stimulating, active life
- Accomplishment – finishing projects
- Competitiveness – sense of achieving better than others
- Achieving Recognition – from others for accomplishments
- Interpersonal Relationships/Bonding – close relationships
- Contentedness – relaxed feeling that things are as they should be
- Social Recognition – respect, admiration from others, more for who you are than what you do
- Personal Growth – expanding one’s mind, learning new things
- Self-Sufficiency – independence, being able to take care of oneself
- Responsibility – taking care of one’s contractual and social obligations
- Nurturing – taking care of others emotionally
- Providing – may be providing financially or emotionally
- Success – personal or professional advancement
- Family – a sense of belonging to a family unit, love for family members
- Successful Parenting – raising productive, worthwhile human beings
- Enriched Life -pursuing new adventures for the sake of enriching one’s life
- Freedom – the right to make independent choices
- Control – a sense of power over one’s destiny
I also observe the Values as described in Rokeach’s list, which follows.
List of Rokeach Values
Terminal Values: Instrumental Values:
|A Comfortable Life||Ambitious|
|An Exciting Life||Broadminded|
|A Sense of Accomplishment||Capable|
|A World of Peace||Cheerful|
|A World of Beauty||Clean|