This article discusses the use of the Value Diamond as a tool for estimating perceived value of a company or product compared with competition.
The Burgess Value Diamond of Customer Perceived Value is a model to help evaluate how customers compare one company (or product) with competitors. It was developed by Ron Burgess, who constructed it as a way to help clients improve and grow business over 30 years working with business owners.
The concept is based on a marketing approach that customers ultimately shape company value, based on their buying behaviors. Buying behaviors are driven based on Perceived Value.
Getting Started on a Strategic Plan
Small business owners are many times “just too busy” to start and complete a comprehensive strategic plan. It is easy to criticize them for not taking the time, except it is many times true that to keep the business going, the owners need to work in the business and rarely have time to work on the business.
Doing regular involved strategy sessions is seen as an exercise that can greatly increase the total value of a business. But time, knowledge of the process, and lack of other managers in a business can fall to the owner alone. While good planning can happen in this scenario, it still falls behind daily demands, but can also miss the valuable input from employees and a realistic look at competitors, external threats, and opportunities. Very small businesses also lack the cash to get outside help from professionals. The Value Diamond can bridge that gap, by providing simple, low time commitment insight into starting a strategy. It works as a first step, and or a periodic snapshot on areas that need improvement in your business.
A customer’s -perceived value is constructed from four elements; perceived value, perceived service, price, and perceived image (or branding). In the world of marketing, customer perception is more important than reality, because only buying behavior affects revenue.
So for these reasons, the use of other models is desirable because operational issues drive margins and profits which in-turn drive business valuations. The Valuation Wheel discussed in an earlier article is a good model to look at the financial and operational aspects of valuations.
Use of the Value Diamond serves as a way to compare products, services and companies, so the examination yields a priority on what aspects of operations should be focused to get the greatest benefit.
Unlike the more structured approaches previously mentioned, the Value Diamond can be easily estimated by managers and sales people who are aware of competitive forces. This simple approach is completed in just a few minutes while most evaluation methods require considerable discovery before making the evaluation.
This approach allows an initial quick shot of the customer’s perceived value, while encouraging more discovery and research to verify and deepen the analysis. Advanced approaches break down the four dimensions into component parts allowing greater accuracy and insight (not discussed here).
The diamond is a spider chart with four dimensions, thus the “diamond”. Using a scale of 1-5 each of the dimensions (or characteristics) is scored.
Each characteristic is scored for the company and two (or three) competitors. They can be used in a simple chart like below, or plotted on a blank Value Diamond chart that can be downloaded here.
Scores between 1 and 5 are then entered into a spreadsheet and plotted using a spider chart.
Quality, service and Image are scored 5 is high, and 1 is low, while price is scored the opposite; 1 is high price and 5 is low price.
Note above: This image uses a scale from 0 to 100 because it is an advanced, calculated model based on outside feedback. When using the tool manually the 0-5 model seems to be less confusing, however the outcome is the same.
The gap between the subject company and competitors become the areas that need action. Note above that there is a substantial “gap” in service. Your company has a perceived advantage over the competitor in service delivered. When the quality is the same, and image is lower the real service image could be better communicated which may allow a matched price as well.
Additionally, the relative gap differences can be easily evaluated to determine investments required compared to the relative value gained compared to competitors. This is a quick way to determine what issues need work first.
For example, if image and quality are lagging behind competitors, it may be that improving image is much less costly than completely re-engineering a product line. While both should be of concern, with limited budget image can be helped in a short time while new engineering or a continuous improvement process would take months or years. Therefore, the priority of tasks is easily determined compared to other strategic development models.
The Value Diamond is not intended to replace strategic planning but to jump start it or supplement it. It does not take into account many operational inefficiencies or HR and other administrative issues. Therefore, other models are more appropriate. However, the argument for a quick start rather a huge delayed start or an incomplete plan is a strong one.
We suggest that you continue your planning process using one of the systems described by this series of articles. See the entire series Articles | Dream Big Exit by Ed Lasak, CPA.
Connect on Ron Burgess | LinkedIn or MicroGiants.biz
Being on time is now a trait of whiteness? The Washington Examiner reported that the National African American Museum thinks many success characteristics are “white” traits. They also claim that other values such as individualism, objectivity and hard work, family and delayed gratification are “signs of whiteness”. This is denigrating to all races to assume that these known positive values are the culture of whiteness. Tell that to the Nigerian immigrants who make more than white incomes in America. Tell that to the Asians and Jews in America. They and all who want freedom, and to succeed in free enterprise world that these noble traits are “white.” Ambition is for all who choose it. The traits assumed to be “white” are for everyone who wants success.
Washington Post Article Here: https://www.washingtonexaminer.com/news/african-american-history-museums-website-says-being-on-time-is-a-marker-of-whiteness
At MicroGiants we mentor young, budding entrepreneurs, of every skin shade; those who want to be successful should follow those who have been successful already. These include blacks like Herman Kane, Dr. Thomas Sowell, and Dr. Ben Carson, and all shades of skin in between black and white. The characteristics that help success are the ones listed below. Ben Carson worked hard to become one of the best surgeons in America, he put current desires after long term, delayed gratification. As a scientist, and HUD Secretary, he is objective.
The list of whiteness includes, “emphasis on the scientific method."
Apparently, anyone who believes in these basic values must “accept their white racial identity and privilege.” However, adopting these values that lead to success in life, is open to all, and is clearly not the exclusive domain of whites. Of course, the article points out that “even some non-whites have internalized the ‘aspects of white culture,’” read this as Uncle Tom.
In my three decades of research and hands-on work with “individual” business owners, I see that the most successful (yes that means financially and always includes community work, giving and strong employee support), have all the characteristics listed on the Whiteness Chart above. Oh yes, the ones that are supposed to be “whiteness.”
The truth is that these are basic values that lead to the kind of success that lifts people from poverty, allows free thinking (including the National African American Museum thinking), reduces human toil, and provides a basis for well-being. When the author labels human values as “white” are they saying that what we need is the opposite of these values.
What does that look like? The opposite of the whiteness characteristics:
To take the universal success values and turn them into a “whiteness” diatribe, is disingenuous on its face. But in today’s political environment, it is simply another way to separate us by our skin tone. It flies in the face of Dr. Martin Luther King who identified the highest ethic possible “don’t judge us by the color of our skin, but the content of our character.”
Dr. King was talking about a character made up of all the values the National Museum of African Americans seems to be discrediting! I am sure that Dr. King saw these as available to all blacks in America and were NOT only available to whites. They were not white constructs, but God’s constructs. Oops, (lost my head), that is a Judeo-Christian idea, so is a white thing too. Funny thing is that it is the Christian philosophy that eventually freed all slaves.
To list international life success values as white, as if they were bad or to be made fun of, is a huge disservice to anyone who wants to live with proven values. It is a way to discredit those attributes in a person that are good, and support humanity. The second list will destroy anyone’s life, except perhaps unless the state will take care of all of us (in the manor of their choosing: yes you WILL like it; as they do in Hong Kong). This brings one to the rational suggestion that perhaps the end goal is something other than lifting the individual up. But of course, the individual does not matter, and rationality is forbidden.
Mahatma Gandhi, said “Our ability to reach unity in diversity will the beauty and test of our civilization.” Calling anything, especially good things, by a race, “whiteness” blackness, redness or yellowness is divisive and ugly. The National Museum of African Americans has violated a hope for unity by assuming that any human value belongs to a race. Let’s talk of humanity and what is good for all of us. Trust in the National Museum of African Americans has been violated as well as the half billion tax dollars spent on it.
 Why Nigerians Are The Most Successful Immigrant Group in the US, Face 2 Face Africa https://face2faceafrica.com/article/why-nigerians-are-the-most-successful-immigrant-group-in-the-us
 Herman Kane was a Vice President of Pillsbury, CEO of Godfather’s Pizza, a Federal Reserve Chairman, and candidate for the US Presidency in 2012.
 Dr. Thomas Sowell, is a renowned economist, professor at Cornell and UCLA, and Fellow at the Hoover Institute at Stanford College.
 Dr. Ben Carson is a world known surgeon, and U.S. Department of HUD Secretary
 National Museum of African American History and Culture, https://nmaahc.si.edu/learn/talking-about-race/topics/whiteness, see chart Whiteness and White Culture in the United States