When you look at how people changed their purchasing behaviour during the pandemic, you can see Maslow’s Hierarchy of Needs in play. Many consumers have shifted focus from aspirational purchases to ensuring that they have the basics for survival – food, health and hygiene products, shelter and security.
Value chain mapping – mapping how customer needs and wants change over time, so you can adapt what you sell to them – is a great tool to really understand what your customers want from you, now and as we come out of the pandemic.
The importance of the hierarchy of needs and value chain mapping
Business leaders know that the hierarchy of needs has a significant effect on people’s intent and actions. But these needs are also always in flux – everything from small, personal life changes to big, national events can make customers shift their focus and how they behave.
Simon Wardley’s value chain mapping theory helps businesses understand how their customers’ needs will change over time, allowing them to adapt the business ahead of time – ensuring that it’s there when the customer needs that specific product or service.
For example, if you run a city-based coffee shop, you’re familiar with your customer’s needs and with the value chain. You know what you need to have in place to provide them with their coffee and danish, when and how they want it. Now you need to add in the evolutionary cycle – how your customer’s needs will change over time. In this case, you might forecast that virtual working will become more popular in the new normal. Maybe a delivery service is an option? How does your business operate now? How can you manipulate your value map to service these potential new needs?
Seven practical steps to successful adaptation
Run a cost-optimisation exercise to ensure your business is in the best position to be agile, proactive and risk-positive.
Complete an end-to-end operational impact assessment to understand which areas of your business, and its supply chains, you need to overhaul. Assessment is essential as potential hotspots can vary not just by business unit but also by location, as the pandemic has affected different places with varying severity.
Analyse your existing business model. Ask how you can maximise revenue and minimise your costs. You need to know why customers choose you over your competitors.
Use the hierarchy of needs to evaluate what’s important to your customers and assess your value chain to understand how you support their goals.
Factor in the evolutionary cycle to your customer value chain mapping – this will help you adapt your operating model to meet future external and internal needs.
Build for agility by making new customer channels digital ones.
Be optimistic! Plan for growth. Look for ways you can adapt your business value chain and model to service future customer needs.
If this year has taught us anything, it’s that every business needs to adapt to change. Understanding what will change, and why, could put your business ahead of others in serving the customer’s needs, by predicting those needs even before their behaviour has changed.
Mapping your business’ value chain to those needs, tracking how they’re likely to change over time and adapting your business to be ready to face a different future, puts your business in the best position to remain competitive.