While the customer value construct can be traced back to the 1980s, its growth in popularity has also been accompanied by inconsistency of its definition and frequent misunderstandings.
Myth = Value always equals low price.
Fact = Value is the benefits you receive from a product for the price you pay for it.
Supplement industry professionals need to acknowledge that “good value” was never just about price-to-quantity ratios. This is an especially important revelation when you overlay the current period of price inflation that has been both sharp and sustained. This has become a top household finance concern with 38 percent worried they may not be able to afford nutrition products in the next year.
Though the American consumer market had become drunk on low prices over decades, supplement brands should feel a sense of relief that value is a subjective idea. Especially today, consumers have expanded the definition of value that incorporates quality, relevance, experience, and convenience. Thus, understanding the value your supplement brand provides consumers can help you to better attract potential customers and better retain existing ones.
When overcoming the perception of value equaling price, it is helpful to visualize the levers a brand can pull to drive value into a product. Consider a wheel, with Value placed at the center, surrounding value you'll find Quality, Relevance, Experience, and Convenience.
Being a high-quality supplement indicates the product was properly manufactured, contains the ingredients listed on the label, and does not contain harmful levels of contaminants. But it also could (or more strongly put…should) include some aspect of evidence about how well the product works in scientific studies from credible publications. Therefore, without subsequently considering price-to-quality ratios in the supplement industry, price-to-quantity ratios are meaningless to calculating customer value.
To drive this point home, I recently explored the “CFU count commoditization trap” that’s plaguing the probiotics market. In that YouTube video, I stated that a probiotic supplement with huge CFU counts of some cheap generic lactobacillus rhamnosus strain shouldn’t be priced at the same level as the Nutiani HN001 strain with similar CFU counts. That’s because the Nutiani HN001 strain has human clinical data that’s recognized in numerous peer-reviewed journals, proprietary manufacturing techniques that deliver high survival rates, non-GMO project verification, and it has a well-established history of use showing no adverse effects. The fact is that more isn’t always better when we’re talking probiotics. Nutiani looked at this quality versus quantity question in a late-2022 survey that found consumers would prefer a product with a low CFU count of two clinically tested strains over one with high CFUs of 12 different strains with no clinical testing.
Today, we live at the center of a flexible, almost choose our own adventure style of consumption, whenever and however we desire it. Throw in that fact that…
Almost all Americans have a supercomputer basically attached to our hand or have use of an internet connection.
There are more options in every CPG category than any other time in history.
So, what happens when you mix all those dynamic marketplace forces together? With consumers having plenty of product options and information to make a well-informed decision, relevance becomes increasingly vital when looking to optimize customer value.
Figuring out why current customers are coming to your supplement brand helps you to identify the most valuable benefit segments. This in turn will better inform marketing and new product development strategies that can more efficiently attract new adjacent audiences. Humans are emotional beings that yearn for relevance, context, and connection. Therefore, being able to show your target market how you understand them better than your competitors will allow you to actively shape perception and compete at a higher level.
Great customer experiences, in the moments that matter most, lead to increased customer value. So, while aspects like ensuring the receipt of desired supplement products in a timely and efficient manner is important, supplement brands need to provide a holistic experience that is useful, desirable, and differentiated to impact customer value. By making every important aspect of the customer experience a little bit better each day, it will create demand for your supplement brand and delight your target audience.
Additionally, a customer’s general impression and experience using your product has an outsized impact on value, especially within the supplement industry. That’s because consumers usually have an intent behind purchasing a supplement product that goes beyond satisfying one of Maslow’s basic physiological needs. In the supplement industry, customer value is a function of performance in that products ability to help them reach a specific wellness goal. If the product performs exceptionally well, thus providing a great experience, then a customer typically doesn’t mind placing a higher value on it and paying a higher price.
When looking to increase customer value through convenience, it’s important to focus on eliminating friction. Points of friction can show up in many different areas within the supplement industry, but let’s first consider a product’s format and package size. For the commuting business professional or busy college student, throwing a single-serving protein bar into a backpack provides a huge level of customer value compared to carrying around a multi-serving tub of protein powder and shaker bottle, right?
Another emerging friction point within the supplement industry revolves around the growing understanding of interconnected health, as per findings in Nutiani’s The Global State of Health and Wellbeing Volume 3. Needing to take supplements that singularly target physical, inner, and mental wellbeing can create quite a cumbersome task within an already busy schedule. That means the ability to conveniently consume less supplements daily in the form of multifunctional products that offer a broad range of holistic health benefits, such as Nutiani’s phospholipid & protein powder, would increase customer value.
As consumers navigate a rapidly changing world, they’re increasingly searching for portable and convenient nutrition to fit their busy lifestyles.
As supplement brands “race to the bottom” in hopes of attracting value-orientated consumers, this article should have armed you with a more nuanced meaning of customer value that helps create strategic optionality. That knowledge will be increasingly beneficial during this “are we already or will we soon be” in a recession mindset that naturally causes many to actively manage their finances.
Owner of J. Schall Consulting
Joshua Schall, MBA is a CPG industry strategist with an emphasis on the emerging and intersecting categories of functional food, beverage, and nutritional supplements. Within the last decade, he’s successfully built J. Schall Consulting into a world-renowned leader in growth strategies. He accredits much of this success to his dynamic fascination of the ever-changing consumer behaviors.