BCG Weekly Brief: Value Is the Deciding Factor for Consumers

In my September 1 Weekly Brief, I shared new findings from BCG’s Center for Customer Insight. Among several big themes, that research pointed to perceived value as the deciding factor in the purchases consumers make. Even when they can afford a product, 67% of consumers say they won’t purchase it if they don’t think it’s worth the price.

Of course, affordability remains a key consideration, particularly when it comes to lower-income consumers. For those shoppers, price can decide whether a product is within reach at all. But for most purchases, price gets a brand into consideration, and perceived value closes the sale.

What Consumers Mean by Value

Quality is the starting point in every category we tested, and it’s the biggest single driver of whether consumers think they’re getting good value. But the difference comes from the second and third drivers, and those vary by category.

In skin care and pet care, it’s personal connection: trust in the brand and how the product makes people feel. In packaged snacks and prepared food, it’s quantity, meaning whether the portion feels right for the price. In staples and mobile, it’s promotions and bundled offers. And in autos, it’s service and convenience.

Walmart, for example, has long competed on value by providing “every day low prices,” but it’s also investing heavily in convenience, speed, and delivery. Its customers think about saving time and effort as well as money. Texas Roadhouse, a US restaurant chain, has built loyalty by offering generous portions and premium food and experiences at a reasonable price. Its diners are willing to spend because they feel they’re getting their money’s worth.

Few brands get this balance right. Only about one in seven of those we analyzed are strongly perceived as delivering value, and they don’t get there by being the cheapest. They deliver on several attributes at once, led by convenience, quality, and trust.

Value Is Personal

Value also varies from one customer to the next and across different occasions. There’s functional value, derived from features and convenience, and emotional value, such as connection, identity, and experience.

Crunchyroll, the anime streaming service, is a good illustration. Price plays a key part in whether fans subscribe at all, but perceived value determines how far they trade up. Higher-tier subscribers aren’t just subscribing for more functionalities—things like concurrent streaming and offline downloads—but also for stronger affiliation, premium identity, and a greater sense of connection to the broader anime community.

AI enables this kind of tailoring at a much larger—and more precise—scale. Our research finds that consumers who use AI to shop report higher perceived value than those who don’t. Consumers also value AI’s ability to tailor recommendations to their individual needs. Companies can do the same from their side. AI makes it possible to understand what individual customers value and tailor products, services, and marketing accordingly.

The big opportunity in personalization today is about tailoring what customers get for what they pay: personalized recommendations, content, early access, exclusive experiences, and concierge-style service for the most loyal.

Where Leaders Should Start

Price is a powerful lever, but lowering prices won’t help if the underlying value equation is wrong. Three steps stand out:

• Start with the customer, not the price point. Understand how value differs by segment, need, and purchase occasion, and identify the attributes that drive choice.
• Design the offer around what customers value. Build bundles, tiers, and add-ons around the combinations customers care about.
• Price to the value you deliver. Understand what customers are willing to pay across different occasions; set package and price combinations to match, ensuring those choices feel fair and easy to understand; and avoid blanket discounts that erode the value proposition.

As cost pressures persist and AI puts better comparison tools in every consumer’s hands, the bar for “worth it” will keep rising. The companies that understand what each individual customer values, and use AI to deliver it in a highly personalized way, will be best placed to earn consumers’ loyalty in the years ahead.

Until next time,

Rich Lesser Global Chair

Further insights