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Business Model Design and Learning by Barbara Spencer

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A Hierarchy of Customer Value

Three decades of marketing research strongly suggests that perceived value is based on assessing product costs and benefits in relation to goals and ­objectives.11 We can see how this works using Woodruff ’s12 customer value hierarchy, depicting three levels of customer goals and purposes (Figure 3.1).

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Figure 3.1. The customer value hierarchy.

According to Woodruff, customers think about value in a means–end way.13 If we start at the top of the hierarchy, we can see that the customers’ long-term goals and purposes shape the desired consequences in use or current job to be done. In turn, the thing that the customer ...

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