WHAT’S THE VALUE?
“Didn’t you just buy that a month ago?” The woman asked.
“Yes, but now I want the bigger one,” The man replied. Exasperated, the woman walked out of the room and focused her mind on something else.
Have you ever heard this conversation before? I bet so. What happened here is the man had a need the first product fulfilled. Once that need was fulfilled, it was replaced by another need. Did the first product degrade so drastically in a month that it needed replaced? No, but the man’s needs changed.
Digging a little deeper, the man saw the value of the first product which is why he purchased it. Then after using the product, he realized it solved his need, which removed the fear, frustration or anxiety his need caused. With that gone, the value of the product dropped. What the man now sees is another need for the same product, just bigger. Maybe the problem still exists in some form that a larger version would take care of.
Perception in History
Value is set upon something simply because we deem it to be valuable. Are diamond rings all that useful?* Not really as they sit on a hand (or in a drawer) and don’t have a function. But we do deem diamond rings to be very valuable. Aluminum used to be so valuable that Napoleon III served state dinners on aluminum plates, while the lesser guests were served on gold or silver plates. Aluminum obtained this brief, high value because it was a new metal at the time and there wasn’t much of it to go around. With it being that scarce, it earned a high value.
Aluminum doesn’t carry the same weight today because it’s much more prevalent and thus the value we have given it has dropped. Value is all perception. The most expensive painting ever sold is Salvator Mundi by Leonardo da Vinci. It sold for just over $450 million. The only reason this painting has such a high value is because of who painted it. If this same painting was done by an unknown artist, it wouldn’t have sold for nearly as much. The product would be the same, but not nearly as valuable because Leonardo didn’t lay down the brush strokes.
If you want to provide value, you must solve a need. Napoleon III needed to look wealthy and powerful and aluminum did the trick. I don’t know what need the Saudi Prince had that made him purchase Salvator Mundi, but apparently it warranted a price higher than the GDP of Tonga. On a smaller scale you must let your customers know what need you are solving for them. Once a customer realizes this, the purchase becomes necessary to relieve the fear, frustration or anxiety. Removing those issues will place value upon your product and by extension, your business.
Find your customers’ needs and provide value.
*I suppose you could say diamond rings are useful because they are a status symbol and that could work to your advantage in some scenarios. Also, they sparkle in strong light and offer an artistic show.