Why do so many products, services and brands grapple with such a very basic concept: people pay for value. But, it’s their perceived value and not the value you assign to it.
Newspapers aren’t dying. People are just buying them less and less because they’re not getting the same amount of value out of them as the used to. Same with in-home phone lines. Most people feel that they can get away with just having a mobile number. It’s like this with movies as well. Movies in the theatre now play on pay-per-view or are available on Blu-ray only a short while after their theatrical debut. Most homes now have big screens (and big sound), and so the experience of going to the theatre has been diminished by many. Nobody cares about owning a physical CD anymore, when you can get a high quality version of most music for your iPod (or whatever).
More media and more technology means more choices. In a world of more choices, the former 800-pound gorillas of their chosen industries now have to figure out how they are going to deliver real value. The kind of value that people are willing to pay for.
What have we really learned about value in the past few years?
- People will pay for an individual song (and maybe an album), but they would like the choice.
- People will pay for great writing – whether it’s in a magazine, newspaper, book or online. But, it has to be great (and not just your perception of great).
- People will pay to see a movie – they just might not go to the theatre or to rent it from your physical store any more.
- People will pay to be entertained.
- People will pay to learn.
- People will pay to be better connected.
- People will pay for an exclusive experience.
- People will pay for a premium experience.
- People will pay for better access to customer service.
- People will pay to avoid hassles.
- People will pay to get things on their own time schedule (when they want it/how they want it).
- People will pay for speed (whatever speed means in your industry).
- People will pay for something that will give them more social clout.
- People will pay for products that are virtual.
- People will pay for information.
- People will pay for more mobility.
- People will pay for more flexibility.
- People will pay for more comfort.
Weekend fun: re-imagine your business (as Tom Peters would say). How might your business change if you tweaked your business model and figured out ways to really increase the value of what you sell (but the value as perceived by your customers… not your ego or historical data).
What else do you think people pay a premium for?