Summary: You understand value but do you understand that value isn’t always what you think it is? It’s about what the customer perceives it to be. Something can be high quality but be perceived as low quality and vice versa. It’s all about perceptions!
The consumer measures value
Value is not what you think it should be, or think you know it is. Nor is value what you think customers think value is.
Value not even directly what customers think, because even that is limiting in some respects – no, value is what consumers think value is – whether they are customers or otherwise. Value is what allows jobs to be done better.
So few companies grasp this concept yet it’s a concept that would save billions of pounds every year. Yes innovate, yes create ideas, but always base them on one simple reality – exactly what consumers value and how much they value it.
Value is the only reality you have – what consumers think is value – both non customers and customers – determines what they decide to buy. The only way you can really assess what value is right now, is to ask them what jobs they are trying to do. No consumer is exactly the same, but many are close in their conceptions of value in solutions, but one rule remains, only the consumer measures what is value – a benefit or a detriment.
The measure of this value by a consumer is always relative to what else is out there. No value exits in isolation; the amount of value in a solution to completing a job can always be compared to something else – even if it’s being compared to doing nothing by the consumer. Therefore value is relative to other offerings. A consumer may think “It just can’t get better than this!” – then boom – along it comes – the new best thing! When you provide greater value, you are being of greater service, and will receive greater rewards.
Comparative decisions on value are often made on a handful of product attributes, in line with the good old 80/20 principle – 80% of the value is given in 20% of the features. Often the value you provide has to be much greater than the competitions value in these key areas in order to entice a real surge of users to your product.
Working with people’s minds not against them
As its perceived value and detriments that count, anything you can do to help customers perceive more value and yet limit the perceptions of detriments works wonders. Whether it’s lots of nice graphics zapping around on a plagiarism software scanner “showing” the scan working, bits of removed debris showing up in mouth wash, or the friendly attitude and smart uniform and of a service person, all these help consumers ‘perceive’ the value they are getting. They add to the value rather than detract from it. They therefore become a benefit, rather than a detriment.
In the same way, for a quite unknown company, having lots of information on your company website about who you are, showing the faces behind the company and what you stand for, and a bit about your history, helps people perceive less detriments – for example it minimises in their minds the risk of doing business with you. Such information would make people feel like they can trust you more. Stick the Virgin logo on there… and you get the idea!
If people can’t perceive the value in your solution, they will not buy from you – ever. That’s why you have to be crystal clear about the value that you are offering. You’ll read about that in the other articles in this section on communicating value effectively.
Working with people’s minds is not just about perceptions either, people like to be kept updated on value and see it being delivered. For example, can you imagine an electric shaver which didn’t have alight showing you it was charging? A microwave without a countdown clock? Ebay without telling you if you are winning the auction?
Even the sound an Ipod makes as you turn it’s wheel speaks to you about the quality of the product, even the satisfying click as you plug in your headphones adds to perceptions of value rather than detracting from them.
Customers can mistake value, and the following example shows it’s perceptions that count!
A company called Parke Davis has a product called Lopid. Market share started to slip to a competitor, called Mevacor. The latter was actually better at reducing overall cholesterol; yet, this benefit was not the best thing for those seeking to reduce exposure to heart attacks. What was actually required was not lowering overall cholesterol, but a lowering of LDL and the raising of HDL cholesterol. The lowering of both, was not as effective as this combination. Yet doctors did not perceive this, given the market research that Parke Davis did. Therefore, Parke Davis has to embark on a significant educational programme to properly educate doctors and patients about the difference, in order to properly align value perceptions with the scientific reality.
Quality advantages must be real of course, but they must be perceived by customers as well, otherwise they are meaningless.
Energy and feeling attaches itself to products
My other area of passion and expertise is personal development. During my studies here, I found that energy can be tagged to objects.
For example, if you have a trinket you wear that reminds you of a special someone it will make you feel great when you look at it.
Imagine though that some unkind souls ridicule you for wearing it, saying that it looks silly. This object becomes tagged with other forms of energy as well. Sometimes now, instead of remembering your loved one you may also remember the hurtful comments those others have made.
Energy and feelings really can be carried by other objects in this way.
It’s no different with products – the energy, passion and feeling of the creator oozes through it. After all, it was the imagination of that person, their mind, which created the product in the first place. For example look at the Ipod – what you see there is a creation of Steve Jobs mind, his very vivid imagination transformed into material form. It is packed with his energy, care for detail and passion. Words are also manifestations of energy, because how they are said and what is said can make you feel things. A good judge of character will not hear words, he will feel the energy that comes from behind them. The very instructions and details given to create products therefore carry energy. Listen to Richard Branson’s audiobooks and you will “feel” the Virgin brand. The Virgin brand is a manifestation of his energy, his passion, his care. Yes, the Virgin brand is… Richard Branson… its personality, is his personality.
You can’t fake this. It has to be real. Realise that whatever imagination, energy, feeling, and words go towards making a product or solution, they will manifest themselves in so many ways at the other end. That’s why you have to do what you love as a company!
Other articles in this section:
What are products?
Jobs
Outcomes to jobs, metrics and qualifiers
Value constants, features, attributes and benefits
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