Customer Value Alignment – The extent to which a company’s products, services, and business practices align with the values and expectations of its customers.
Every industry has its own somewhat unique mix for measuring how successfully it creates value for its customers, and different visions for what that success looks like.
But regardless of what their measure of success is – offering the best price, quality products, excellent service, or strong brand identity – industry leaders and disruptors alike can all trace that success back to Customer Value Alignment.
To achieve that level of Customer Value Alignment, companies need a thorough understanding of the evolving expectations of their target customers to design (and continuously redesign) their offerings and practices accordingly. The results are undeniable: increased customer satisfaction, trust, loyalty, market leadership, and longevity.
Here are 10 examples of what value-aligned companies look like.
Customer Value in Sports and Apparel:
1) Patagonia: This clothing company is famous for its high-quality outdoor clothing and its total commitment to environmental sustainability. Its products are durable and sustainably sourced, designed to meet the needs of both outdoor enthusiasts and the eco-conscious.
Where Patagonia really aligned itself with customers, however, is when the brand firmly resisted shareholder pressure to go public.
They realized that doing so would jeopardize the very thing that customers valued most: their authentic stand against environmental degradation.
Committing to shareholder value would only mean being forced into a “growth at any cost” mindset, which would turn them away from that core value.
To this day, Patagonia proudly stands by that choice to honor what its customers value most and is famously stringent about taking on any partnerships that would conflict with that value.
2) TOMS Shoes: TOMS is widely known for the origination of the “one for one” model, where for every pair of shoes purchased, a pair is donated to a child in need.
However, controversy arose when outside studies showed that beneficiaries of this program (Argentina, Ethiopia, Guatemala, Haiti, Mexico, Rwanda, South Africa, and parts of the US) began to exhibit dependency on outside donors, and other unintended negative economic impacts.
TOMS, instead of being just a feel-good company, wanted to do good for both its customers and beneficiaries. To re-align with its values (and its customers’ values), TOMS made the necessary adjustments and moved away from its one-for-one model, expanding into impact grants (per 2019 Impact Report) to help those in need.
TOMS continues to invest 1/3 of its profits back into local communities and grassroots organizations through these grants.
3) Warby Parker: This eyewear company’s core mission is to create affordable and sustainable eyewear, and to bring eyewear online for a market that previously didn’t have that choice. Just 2.5% of eyeglasses were purchased online before Warby Parker changed that.
They saw a huge unaddressed market and aligned their services with that customer base.
They accomplished this in a few ways, first by designing eyewear in-house and interacting with customers directly.
They also pioneered at-home try-ons, where customers could have 5 frames of their choice shipped to their home to make their selection. More recently, they’ve debuted tech solutions for virtual try-ons.
4) Cariuma*: This shoemaker found its customer value alignment niche at the crossroads of sustainability, style, and comfort. Its sneakers are made from eco-friendly materials, and in its own take on “one for one”, the company plants a tree for every pair of shoes purchased.
They found customer alignment with people who value environmentally-friendly products and practices, and shoes that would stand the test of time in both durability and style.
*Cariuma uses Worthix to continuously track how aligned they are with their customer value by monitoring changes in their perceptions, expectations, and market alternatives. Ask one of our experts how it’s done below.
5) Nike: This sportswear company takes its position as a brand made for all athletes seriously. When Colin Kaepernick was in the crosshairs for kneeling in protest, Nike backed him completely. They bounced back, despite some angry customers burning their merchandise.
They took the customer values of social justice and racial equality to heart publicly and rebounded stronger despite the ensuing controversy.
Customer Value in Grocery and Home Care
6) Seventh Generation: This household cleaning and personal care products company takes the increasingly prevalent customer values of sustainability and corporate responsibility to heart, starting with its name.
The company attributes the name “Seventh Generation” to the “Great Law of the Iroquois”. Per the company, the document states, “in our every deliberation, we must consider the impact of our decisions on the next seven generations.
To uphold that ideal, Seventh Generation’s products are made from natural and biodegradable ingredients and are packaged in recycled materials that are also easier to recycle, reducing their use of virgin oil wherever possible. Importantly, they understand that their customers value corporate responsibility and sustainable practices over price. Products are not cheap and are primarily stocked in higher-end stores.
7) NotCo: This company takes plant-based foods to a new level. NotCo’s goal is to reduce C02 emissions, protect wildlife diversity, and reduce resources wasted in farming all at once by reducing reliance on animal products.
NotCo emphasizes the quality of their products, and uses an AI called Giuseppe to test infinite combinations of plants to look, taste, and cook as close as possible to their counterparts.
Their customer value aligns with people who want to help the planet, but don’t want to give up the quality foods they’ve grown used to. Crucially, NotCo’s customers must also be less price-sensitive since their food alternatives are more expensive than their counterparts.
Customer Value in Technology and Automotive
8) Apple: This tech company built its name with sleek, user-friendly products and an obsessive focus on design and consistent innovation. Customers value the ability of products in the Apple ecosystem to “just kind of work together”.
Instead of competing on price with its closest competitors, Apple maintains its prestige pricing through strong brand identification and social proof.
9) Zoom: A company that offered video conferencing software pivoted to cater to the unprecedented increase in remote work and virtual meetings due to the pandemic, becoming a leading player in the teleconferencing market almost overnight.
Though Zoom has since seen stiff competition from Microsoft Teams, Slack, and other teleconferencing platforms, it got a strong head start when it aligned itself with the sudden need of a previously unaddressed market.
10) Subaru: This carmaker lives by the “Subaru Love Promise, which is the company’s vision to show love and respect to everyone, and to support its communities and customers nationwide”.
You can see this throughout their messaging and ads, as well as their commitment to serving customers.
Some locations even remove sales commission from the equation to make sure the customer is getting the car they want at the price they’re looking for without being pressured into a bad sales experience.
Their alignment with customer value on service and customer care has made Subaru Kelly Bluebook’s Most Trusted Brand for eight years running, a real feat in an industry that is generally considered untrustworthy.
Bonus: One company that didn’t do Customer Value Alignment so well…
Customer Value Alignment as a concept is simple, but executing on it consistently in volatile markets is something even market leaders are still figuring out.
Take Peloton’s home gym equipment, for instance. Many companies saw similar trajectories during the 2020 pandemic, but Peloton’s rise in valuation was one of the sharpest, followed by one of its steepest falloffs afterward.
Their fortunate position and timing as a way for customers to stay active (and sane) during lockdowns led to a meteoric rise, but when they failed to adapt to the market’s return to normal as people got back to the gym in person, gravity caught up quickly.
Peloton’s inventory grew while demand sank. The resulting whiplash sent the stock tumbling from over $40 a share to less than $7 in just 13 months.
It’s worth noting that strong customer value alignment isn’t a reliable indicator of share price performance (case in point, Patagonia). However, it was a clear signal that something about their customers’ expectations had shifted dramatically, and their valuation became overinflated as a result.
No matter your industry, you don’t want a dip in stock prices to be your first warning sign.
It’s not enough to simply create value. That value must also align with what customers need and expect for a company to remain customers’ top choice. Furthermore, that value must be continuously monitored and maintained for a company to stay relevant.
Customers are the driving force that makes and breaks markets, not companies, so any changes in core customer values should be reflected in the company’s offerings as quickly as possible.