In a world with too many choices, aligning a product’s price with its perceived benefits is critical—but many companies seem to miss this simple point. A good question for any company to ask itself is “What would Goldilocks think?” Instead of offering too few benefits—or too many—for a stated price, they must perfectly align benefits and price across the product category and the brand portfolio, finding the combination that is “just right.”

To do this, companies must assess how customers accord value to products and brands within a category. From the customer’s perspective, value has two components: the benefits received and the price paid. Value increases as benefits are added at the same price point or as price is reduced for the same benefits. After gauging customers’ perceptions of value, managers can plot a simple chart that reveals any misalignment and use it to balance the benefit-price equation. This approach reaped huge dividends for Swingline, one of the most recognizable brands in office products.

Several years ago Swingline was growing only modestly and was on the verge of losing retail distribution for the category with the greatest growth opportunity: electric staplers. After extensive research, the company concluded that price and perceived benefits were poorly aligned across its products: Customers thought that some of its products were too expensive and others were too cheap.

Swingline’s research identified a top segment of customers who were highly demanding and very much involved with paper tools. These “stapler aficionados” were willing, even eager, to pay a premium for a stapler that could handle constant heavy-duty use without ever breaking down. Yet until Swingline came to fully understand their perceptions of value, it failed to communicate why its electric staplers—priced up to 10 times as high as a basic manual stapler—represented good value.

Working with similar insights along the entire product line, Swingline altered its strategy; it persuaded retailers, for example, to reorganize the layout and signage of stapler shelves to reflect customers’ underlying value equation: product benefits by price tier. And the company shifted its communications to focus on the specific benefits—such as “no jamming”—that resonated most with each customer segment, rather than on basic product features that customers found less motivating. The cheapest staplers were promoted as delivering basic functionality at the lowest cost, midtier products as durable and reliable and deluxe electrics as superior performers for “elite” users.

Within months the sales of electric staplers had doubled, while premium manual staplers whose sales had been flat experienced strong double-digit growth. The new marketing model encouraged many customers to trade up, turning Swingline’s own performance around by increasing sales and margins.

Venkatesh Bala is the director of the Economic Center at The Cambridge Group in Chicago. Jason Green is a principal at The Cambridge Group.

Block that defense: how to make sure your constructive criticism works

Why do top executives have difficulty receiving and responding to constructive criticism? Because so many high-fliers have received little criticism in their careers. As Chris Argyris, director emeritus of the Monitor Group (Cambridge, Massachusetts) and the James Bryant Conant Professor of Education and Organizational Behavior Emeritus at Harvard Business School, writes in “Teaching Smart People How to Learn,” a 1991 Harvard Business Review article, “Because they have rarely failed, they have never learned how to learn from failure.”

How they did it: charge what your products are worth

In a world with too many choices, aligning a product’s price with its perceived benefits is critical—but many companies seem to miss this simple point. A good question for any company to ask itself is “What would Goldilocks think?” Instead of offering too few benefits—or too many—for a stated price, they must perfectly align benefits and price across the product category and the brand portfolio, finding the combination that is “just right.”

Brain gain

(Last of five parts)

It’s easy for Filipinos to decide to leave the country to seek greener pastures. It’s much harder for these Filipinos, used to working abroad and earning sizeable sums, to come back.

Talent Search

(Fourth of five parts) 

Today’s companies face five critical business challenges: globalization, technology, the quest for profitability through growth, intellectual capital constraints and the exigencies of continuous change. Regardless of their industry, size or location, these challenges require these organizations to continuously build new capabilities—a responsibility which, University of Michigan School of Business professor Dave Ulrich writes, human resources (HR) should embrace for these organizations to last.

Civil Servants No More

(Third of five parts)

Jenny Balatbat left for the United States to teach kindergarten pupils, leaving behind her job as a teacher at the San Gabriel Elementary School in Bulacan.

Employee-Retention Strategies

(Second of five parts)

MANAGING talent has become more essential to the private sector than it used to be. Companies are now beginning to dig up insights into managing talent that should allow them to deal with brain drain in a more organized way. What is bold, they say, is to make lemonades when life gives you lemons.

THE WAR FOR TALENT

(First of five parts)

When the management of Fairchild Semiconductors, a global electronics firm, offered industrial engineer Manuel Villa, 32, a management job in Singapore three years ago, he didn’t hesitate to grab the offer.