We will speak frequently of value, as in “the worth of something compared to the price paid or asked for it.” [oxforddictionaries.com 2018]. It is important to understand deeply what people value.
People will exchange money, which they value, for products, services, and experiences which they value more. That is, if someone pays $10 for a loaf of bread, this means that the loaf is more valuable to them than the $10, otherwise by definition they would not have made the exchange. Perhaps the value of the loaf is contextual. Perhaps the loaf is more valuable to someone who is starving than to someone who has just eaten or who has lots of alternate food choices.
This means that we have to provide what people find valuable, not simply what we like to make for find easy to make.
The satiated person may not want a loaf of bread, but after walking for hours in the hot sun in the narrow crowded streets of Venice Italy, that person may happily pay $30 for a beer and the unique privilege of sitting under a sun umbrella near the water, be waited on, and gaze out at the harbour. I did. At a time and place, I demonstrated what I believed was valuable.
Same loaf, different personal contexts, different value.
Taking this discussion a bit further and more generally, customers buy value, not products, services, and experiences as such. They buy what the products, services, or experiences do for them. For example, most people don’t buy an electric drill for the sake of owning one, regardless of the aesthetics of the device, they buy one to produce holes in things. They buy the capacity and ability to produce holes, not to own an electric drill as such.
Deeply understanding what people want, what they want to achieve, and how they want to feel informs us about what we may be able to produce in order to satisfy their needs.
A quote from Clayton Christensen from his book Competing Against Luck is relevant at this point. Christensen writes about jobs to be done. I will write more about jobs to be done later. For now, whenever you see job or jobs to be done and feel confused, substitute problem to be solved. However, as with a lot of things on this planet, there is more than one way to look at things, and in this case not everything that people are trying to do is a problem:
A job is defined as the progress that a customer desires to make in a particular circumstance.
The Theory of Jobs to Be Done requires that we:
- Focus on deeply understanding the customers’ struggle for progress, in specific contexts,
- Understand the trade-offs the customers’ are willing to make, the set of competing solutions that must be beaten, and the anxieties that must be overcome,
- Create the right solution system with an attendant set of experiences, that satisfies the customers’ functional, social, and emotional requirements, i.e., that solves the customers’ jobs well, every time,
- Is not about products per se.