DOES POLITICAL MARKETING NEED

THE CONCEPT OF CUSTOMER

VALUE?

Ross Brennan

Middlesex University Business School

The Burroughs

Hendon

NW4 4BT

r.brennan@mdx.ac.uk

+44 (0)20 8411 5861

Keywords

Customer value, customer value hierarchy

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DOES POLITICAL MARKETING NEED THE

CONCEPT OF CUSTOMER VALUE?

ABSTRACT

As internal sources of competitive advantage have proved increasingly elusive, and

the marketing environment has become ever more turbulent, marketing scholars have

suggested a customer-value focus as the route to competitive success. Considerable

effort has gone into conceptualising customer value, and identifying the

characteristics of a customer-value based marketing strategy. This paper explores

whether these emerging ideas in strategic marketing are applicable in the field of

political marketing. In particular, Woodruff’s (1997) conceptualisation of customer

value as a means-ends hierarchy is examined for its potential contribution towards

political marketing theory.

1 INTRODUCTION

The extent to which commercial marketing concepts and practices can be transferred

effortlessly to the political marketing context remains a moot point. Nevertheless,

each new trend in mainstream marketing thought may have important implications for

political marketers, and should perhaps be evaluated on the basis of presumed

innocence (usefulness) until proven guilty (irrelevant). This paper addresses a

prominent recent trend in mainstream marketing thought, the focus on customer value
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as a source of competitive advantage, and asks whether political marketing could

benefit from the adoption or adaptation of the customer value concept.

It is fair to say that several conceptions of value have become prominent in marketing

and strategic management in recent years (Maklan & Knox 1997; Payne, Holt & Frow

2000, Blois 2003). During the 1980s and 1990s academics and practitioners in the

field of strategic management began to focus on ‘shareholder value’ as the over-

arching purpose of any commercial enterprise (Rapaport 1986). This approach to

strategic management has twin supposed benefits; first, it puts the interests of the

owners of the business at the heart of strategy, and, second, it engenders a longer-term

approach to business decision-making than does an emphasis simply upon

profitability. Recently, Doyle (2000) has argued that shareholder value should be used

as the yardstick against which marketing strategies are measured. In essence, he is

arguing for a recalibration of marketing metrics. Older notions, for example that the

aims of marketing strategy should be to generate increased sales or to build market

share, are replaced by the shareholder value criterion. Doyle argues that only in this

way will the marketing profession be able to lay claim to influence at the most senior

levels in business – that marketing strategies must be legitimised by having a

demonstrable link to shareholder value generation. On the other hand Slater (1997,

p164) argues that: ‘Superior performance is the result of providing superior customer

value; it is not an end in itself’. He cites evidence that businesses achieving long-term

excellence focus on delivering value to customers, rather than directly on profitability.

And while the concept of shareholder value is manifestly a problematic one to apply

to the political sphere (since political parties are not joint stock companies), the

concept of customer value certainly merits attention.

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The aim of this paper, therefore, is to address the relevance of the concept of customer

value to political marketing. There is clearly a debate in the political marketing field

concerning the extent to which conventional marketing ideas can be transferred to the

political arena. For example Egan (1999) seems to argue for relatively easy crossover

of concepts from traditional marketing, whereas O’Shaughnessy (2001, p1047) leans

in the other direction: ‘Marketing is a business discipline whose relevance lies

primarily in business: we should not assume that political contexts are invariably

analogous to business to the extent that methods can be imported and used with equal

effect.’ There can be no easy presumption that marketing concepts of value will

transfer readily into the political context. Nevertheless, these are important

developments in the field of marketing, and their relevance to political marketing

deserves to be investigated.

2 CUSTOMER VALUE

Customer value, market orientation and trends in the marketing environment

It is understandable that the concept of customer value should have considerable

prominence in the marketing literature. Arguably, marketing can be defined as the

management function that is concerned with creating customer value (Anderson and

Narus 1999). Customer value is closely aligned with ‘the marketing concept’ and with

‘market orientation’ (Slater 1997), the idea that the efforts of the organisation should

be focused on the identification and satisfaction of customer needs. Lees-Marshment

(2001) has argued that ‘market orientation’ can contribute to the success of a political
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party, and O’Cass (1996) found a high level of support in political circles for the

marketing concept once it was expressed in terms appropriate to the political context.

These contributions suggest that the adoption of the customer value concept in the

political arena might be beneficial.

In the commercial arena the argument in favour of adopting a customer-value

approach to marketing is derived from two observations. First, that internal sources of

competitive advantage (e.g. quality, process re-engineering) have been exhausted.

Second, that environmental pressures including global competition, slowly growing

economies, more demanding customers (Woodruff 1997) and, generally, ‘an

increasingly turbulent and complex competitive environment’ (Slater 1997, p163) are

forcing companies to seek out new sources of competitive advantage. As a parallel, in

the political arena one could argue that conventional sources of competitive

advantage, such as ideology and class loyalty, are increasingly ineffective. The

political arena has also been affected by several of the environmental pressures

mentioned by Woodruff and Slater. Citizens are proving to be more demanding

‘consumers’ of state services (expecting both better services and lower taxes),

demographic change is looming large on the political agenda (who is going to pay for

the pensions of the baby boomers?), and slowly growing economies create ever more

difficult political and economic decisions for governments. If customer value offers

an opportunity for commercial enterprises, can it do the same for political parties?
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Defining customer value

There is no clear consensus on a definition of customer value. Woodruff (1997)

argues that the common characteristics of definitions of customer value are a linkage

to product or service use, a focus on customer perceptions, and the involvement of a

trade-off between customer benefit and customer sacrifice. Indeed, customer value is

usually defined as customer-perceived value, which has itself been defined in a

number of related ways. Christopher (1996) defines customer value as the ratio of

customer perceived benefits to the ‘total cost of ownership’. Raavald and Grönroos

(1996) define ‘customer-perceived value’ similarly as the ratio of perceived benefits

to perceived sacrifice. They extend the concept of costs to include non-financial and

intangible sacrifices made by the customer, and extend both costs and benefits to

include the effects of a particular exchange episode on the longer-term relationship

between the customer and the supplier. Payne et al (2000) also argue that the

relationship between the customer and the supplier may itself represent a source of

value for the customer, so that the effect on customer value of any single exchange

episode must take account of the effect on the longer-term customer-supplier

relationship.

In passing, it is worth briefly noting an interesting inconsistency in the way that

customer value has been defined. While Christopher (1996) and Raavald and

Grönroos (1996) define customer value as the ratio of benefits to costs, Blois (2003),

Eggert and Ulaga (2002) and Lapierre (2000) define customer perceived value as the

difference between customer perceived benefits and customer perceived sacrifice. It is

outwith the scope of this paper to delve much deeper into this particular anomaly.
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Suffice it to say that, mathematically, a ratio and a difference are two quite different

things, and the practical implications of these definitional divergences deserve

investigation. At its simplest, if customer value is defined as the ratio of benefits to

sacrifices, then an equi-proportional increase in both the numerator and the

denominator will lead to no change in perceived value. Interpreted very simply, this

would suggest that an individual’s ‘political customer value’ would be unaffected by

an equi-proportional increase in taxes and benefits. However, if customer value were

defined as the difference between benefits and sacrifice then such an equi-

proportional increase would indeed change perceived value.

Customer value in political ‘markets’

At it simplest, customer value analysis could be construed as voter value analysis.

Perceived voter value can be defined analogously to customer value as a function of

perceived voter benefit and perceived voter sacrifice. Perceived voter benefits may be

tangible (e.g. I find it easier to visit my doctor) or intangible (e.g. I feel that there has

been an improvement in law and order). Perceived voter sacrifice may also be

tangible (e.g. reduced services, increased taxation) or intangible (e.g. I feel as though

my civil liberties have been reduced). It is even possible that perceived voter value

may include elements of the relationship benefits and sacrifices suggested by Ravald

and Grönroos. A voter may derive a feeling of satisfaction from the belief that he

shares certain values with a political party, and this satisfaction may be eroded if the

party chooses to reposition itself. This might be the case if a political party was

considered to have shifted along the spectrum so that it no longer elicited the same
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feelings of affiliation from traditional supporters. Such accusations have been made

against the British Labour Party, for example (Rawnsley 2001).

However, this rather glib translation of the customer value concept to the political

context must be tempered with caution. A business exists to make money for

shareholders by serving customers. A government exists to serve the interests of all

citizens, including those who voted for the governing party, those who voted against,

non-voters, and the disenfranchised. While the recommendations from the literature

on customer and shareholder value are clear with respect to commercial businesses –

to maximise some joint function of customer and shareholder value – the same clearly

does not apply in the political arena.

Woodruff’s Customer Value Hierarchy Model

In a wide-ranging review of the customer-value literature, Woodruff (1997) proposes

a new, more complex and comprehensive conceptualisation of customer value.

‘Customer value is a customer’s perceived preference for and evaluation of those

product attributes, attribute performances, and consequences arising from use that

facilitate (or block) achieving the customer’s goals and purposes in use situations.’

(Woodruff 1997, p142)

He argues that customer value should be conceptualised at three levels, inherent in the

above definition, namely the levels of attributes, consequences, and goals. These three
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levels were incorporated into the ‘Customer Value Hierarchy Model’, figure 1.

Desired Customer Value Customer Satisfaction

with Received Value

Customers’ goals Goal-based

and purposes satisfaction

Desired consequences Consequence-based

in use situations satisfaction

Desired product Attribute-based

attributes and attribute satisfaction
performance

Source: Woodruff (1997), Figure 2, page 142

Figure 1: Customer Value Hierarchy Model

Customer value is conceptualised as a mean-ends hierarchy. Initially, at the pre-

purchase stage, customers are concerned to identify and assess the products as bundles

of attributes. Subsequently, by buying and using the product the customer learns how

well it performs (value in use, possession value). At the highest level, the customer

understands the contribution that the product makes to the achievement of their goals

and purposes. The two columns of figure 1 (desired value and received value) make

the well-established distinction between customer expectations (desired value) and

customer-perceived performance (received value) (Parasuraman, Zeithaml and Berry

1985).

Parasuraman (1997) argues that the customer value hierarchy supports the need to

assess customer value beyond the attribute level. He proposes that as customers move

from first-time to short-term to long-term customers, their value criteria change. In

particular, while first-time customers will focus on attribute-level criteria, short-term

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customers will focus on consequence-level criteria, and long-term customers on goal-

level criteria.

Desired Voter Value Voter Satisfaction

with Received Value

Voters’ goals Goal-based

and purposes satisfaction

Implementation Consequence-based
through legislation satisfaction

Desired policy Attribute-based

attributes and manifesto satisfaction
promises

Source: based on Woodruff (1997), Figure 2, page 142

Figure 2: Voter Value Hierarchy Model

Figure 2 is a direct transfer of Woodruff’s customer value hierarchy model to the

political context. At levels one and two product attributes have been replaced by party

policies and manifesto promises, and desired consequences in use situations have

become the conversion of policy and manifesto promises into legislative acts. At the

highest level the voter evaluates the extent to which the political party has facilitated

or impaired the achievement of life goals. Figure 1 suggests that the buyer of a

product or service acknowledges that a product which appears to have all of the right

attributes may not actually perform the task that was expected of it, and must be

evaluated in use. Even if it performs as expected, it may not have the life-enhancing

effect that was expected from it. Similarly figure 2 suggests that the voter

acknowledges that a political party may not deliver the legislation it promised, and
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must be evaluated in power. Even if it delivers the expected legislation, the effects on

the voter’s overall lifestyle and purposes may not be as expected. By analogy with

Woodruff’s definition of customer value, the following definition of voter value is

suggested.

‘Voter value is a voter’s perceived preference for and evaluation of those policy and

manifesto attributes, legislative performances, and consequences arising from election

and the exercise of power that facilitate (or block) achieving the voter’s goals and

purposes.’

In the case of customer value Parasuraman (1997) argues that first-time customers

focus on attributes, short-term customers on consequences, and long-term customers

on overall goals. This suggests that, by analogy, those voting for a political party for

the first time are attracted by policy and manifesto promises. As they become loyal

voters so they focus on progressively higher steps in the means-ends hierarchy. Short-

term supporters focus on whether manifesto promises have been turned into

legislation. Long-term supporters evaluate whether the party has facilitated their

lifestyle goals.

3 CONCLUSION: PRACTICAL AND RESEARCH

IMPLICATIONS

It is rather easy to take the concept of customer value and develop plausible parallels

with the political marketing field. Just as conventional sources of competitive

advantage in product markets have become increasingly less reliable, so have the
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traditional sources of political advantage. Many of the trends – demographic change

and more demanding customers, for example - to which scholars allude when

advocating customer value as the basis for competitive strategy either directly affect,

or have parallels in, the political sphere. Definitions of customer value, whether the

more prosaic (the balance between customer-perceived benefits and sacrifices) or

more sophisticated (Woodruff’s means-ends hierarchy), can be readily converted into

political language. Just because it is easy does not make it right, of course. This paper

has only briefly alluded to the manifest differences between a ‘customer’ and a ‘voter’

and the implications of this for the application of ‘customer’ value strategies in the

political arena. This distinction, and those differences, are deserving of further

scholarly attention.

Parasuraman’s (1997) interpretation of Woodruff’s (1997) conception of customer

value generates interesting implications both for practice and for research. The

suggestion is that different customer cohorts use a different perspective to evaluate a

seller’s offering. Transferred to the political sphere this implies that new voters make

their decision on the basis of policy promises, semi-loyal voters evaluate the extent to

which policies were delivered, while long-term supporters concern themselves with

the extent to which the party is facilitating the achievement of their life goals. For

example, the first-time voter is attracted by the promise that interest rates will be kept

low, the semi-loyal voter assesses whether this has been delivered, while the long-

term supporter evaluates how this has contributed to their ambition to become a

property owner. Parasuraman (1997) suggests that market research data should be

gathered on a customer cohort basis (new customers, short-term customers, long-term

customers) in order to analyse these differences in expectation and perception – which

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are believed to underlie perceived customer value. The same recommendation could

be made to political parties. If the means-ends hierarchy definition of customer value

can be effectively transferred to the political sphere, then differences between voter

cohorts are to be expected in terms of their evaluation of a political party’s

effectiveness. These differences will cut across demographic groupings. For

researchers, the challenge will be to disentangle the ‘voter cohort’ effect from the

many other effects influencing voter behaviour. Nevertheless, it should be possible to

devise a methodology to test the voter cohort hypothesis. For example, by taking a

sample of long-term supporters of one party, and comparing their approach to

evaluating party performance to another, demographically matched sample of people

who have voted only once for that party.

At the practical level the means-ends hierarchy suggests that voter segmentation and

targeted voter communications, based on voter cohort, could be an effective basis for

marketing strategy. Attribute-based (policy-based) appeals are most effective for

floating voters (‘we will invest more in schools’). Appeals based on the delivery of

promises are most effective for the short-term supporter (‘we did invest more in

schools and so the education system has improved’). However, appeals to long-term

supporters should be based on a demonstrable contribution to the achievement of

broader life goals (‘you/your children are better educated and have better life chances

because of our investment in schools’). Incidentally, this approach emphasises the

need to put effort into cultivating and retaining existing voters as well as into

attracting new voters. This coincides nicely with the many recent exhortations from

relationship marketing scholars to focus on customer retention as well as customer

acquisition (e.g. Christopher, Payne & Ballantyne 1991, Reichheld 1996).

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In conclusion, there is face validity in the argument that the concept of customer value

can be of use to the field of political marketing. This paper has only made the first

steps towards translating the ideas of customer value scholars into concepts relevant

to the political sphere. Nevertheless, Woodruff’s customer value hierarchy model may

well hold conceptual and practical utility for political marketers. Further research into

the application of the customer value hierarchy model in the political sphere seems to

be justified.

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