Last week in Part 1 of this ‘How to Make Money’ blog series we talked about The Paradox of Money – How focusing on just the money means you miss the whole value concept and in the end leave a whole lot of money on the table.
So this week we are going to delve into this thing called ‘value’.
After all, what is ‘value’ really?
It’s such a subjective thing.
Something that is valuable to one person might be of no value at all to another. So, as entrepreneurs, how do we know that what we think is a cracker idea is also deemed a cracker idea by the customers we want to attract?
By understanding the two faces of value!
Face 1: What is ‘value’ to you?
Face 2: What is ‘value’ to your customers?
Are they the same?
As humans we suffer from personal validation bias. We will take something as fact if it fits in with our perspective of the world and is significant or meaningful for us. We will even go to great lengths to hunt out information to support our perspective so we can be right.
Unfortunately this clouds our judgment when it comes to deciphering what the market deems as valuable.
As entrepreneurs and business owners we need to step away from our own perspectives and biases. What appears totally unique and valuable to us may be seen as completely useless by the market i.e. your customers!
Newsflash: Clients and customers only care about what you can do for them!
What is ‘value’ as defined by your customers?
The easiest and most efficient way to find out is simply to ask them!
- Survey your customers regularly.
- Ask them questions about how your product or service makes them feel.
- Invite your customers in to be a part of your next product or service creation so they feel part of the experience.
BUT! This is only the first part of deciphering what ‘value’ is to your customers.
Most people forget the next bit.
Steve Jobs once said:
“It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.”
This is why the second step is so important. You have to make sure you ask your customers how your product or service makes them feel. How competitor products make them feel. How nirvana would make them feel.
‘Value is a subjective experience that is mainly emotional, NOT logical.’
Customers receive value when they feel relief, hope, joy, superiority, validation, empowerment etc. These are all feelings, not features and benefits.
They may not know what they want but they know how they want to feel.
This doesn’t change.
Once you know this you can go away and innovate to your hearts content Steve Jobs style. Echo the emotional words and feelings your customers used in your marketing and promotions and bingo you will have created something that will set your customers hearts alight.
Speak to the hearts of your customers and they will buy before you have even tried to sell anything!
If giving value is one part of any good value exchange then next week we are going to look at the other side of this equation – The Law of Compensation.
What type of receiver are you?