Have you ever wondered why some products and services can fetch vastly higher prices than others despite the practical value being kind of similar?
It’s frustrating as all hell when it’s your product or service that’s languishing in the discount bucket while others are enjoying the limelight!
So far in this blog series we have looked at some of the basic fundamentals of how to make money but these will only take you so far.
To make that kind of money we need to take things up a gear, so hang onto your skirts and let’s dive right in.
This is largely the practical value of a product or service. Practical value is what a product does, its features and benefits.
It doesn’t necessarily elevate a product or service into the rockstar realm.
So what does?
Intrinsic value is intangible, hard to quantify and hard to copy but it’s what people pay the big dollars for. It has nothing to do with the features and benefits of something (practical value) and has everything to do with the perceived value that is created by clever positioning.
If we want to make more money from the practical value that we have created then it is time to focus on increasing the intrinsic value.
Think about it.
Why can Gucci command $5000 for a handbag yet some amazingly talented up and coming designer can only squeeze out $200?
Practically speaking both products do exactly the same thing. They hold your personal items in a convenient and organised way while you are out and about. That’s it!
So why would anyone pay $5000 for something they can get for $200 (or even $20!)?
Because having a Gucci handbag is a status symbol. It makes a statement to others about your financial success, or love success depending on who bought it!!
These are all things that make people feel significant, important, successful, elevated above others.
Gucci has expertly positioned their brand as a status symbol. Their products are elitist, exclusive and only for the super rich. If you are in that club then you can show it simply by carrying a Gucci handbag.
Now let’s look at the fake Gucci handbag market!
Why do people go wild for these $10 rip offs at the Chinese markets? Because people want to feel what it’s like to be elitest, special and in the upper leagues.
The very fact that these luxury brands can still command such huge prices despite the rip offs being sold for pennies at markets all over the world will give you a window into how successful they have been at creating serious intrinsic value.
So how do you increase the intrinsic value for your product or service?
Here are 3 steps to think about:
- Get crystal clear on the exact problem you are solving for your perfect customer so you can speak directly to them and how they want to feel.
- Create some magnetic marketing & PR.
Once you know the exact problem and how your customer wants to feel you can pepper your external marketing with these words and emotions and draw your perfect customer in. You can use some clever PR strategies to position your product or service in the right circles.
- Once you’ve attracted your perfect customer give them super valuable (as perceived by them!) free content using blogs, articles, videos, trainings, interviews, Q&A’s, product samples, product ideas or anything else that allows your perfect customer to get to know you, your product, service or solution before you ever sell them anything.
People pay more for what they know, like and trust and even more when it makes them feel how they want to feel.
Next week we’re going to look at how you need to feel in order to execute this intrinsic value master plan.