Why value has almost nothing to do with your product

Peter Whent
November 29, 2020

Photo (c) joshdss. Used under Creative Commons Licence 2.0

We all see the world differently

Since the day they first shuffled around in outsized football boots that looked more like canoes on their tiny feet, Jim and Andy had been proud Manchester football fans.

But a furrow as wide as a canyon had been ploughed down the middle of their house, dividing them. Jim was a Red, a Manchester United fan. Andy was a Blue, a Manchester City fan. Two brothers facing each other from entrenched positions across the Pantone Chart.

Today was the twice-yearly event they dreaded; City were playing United. The local derby where red and blue came together in a Titanic battle for the keys to the city.

It was a typically fierce English Premiere League derby. What both sides lacked in finesse they made up for with pace and bone-jarring tackles that drew attention on the Richter Scale.

Manchester United were two up by half time. But two quick goals for City ten minutes from time, gave United a weapons grade dose of the jitters.

The grandstand finish was epic. After a spell of end to end play, City scored the winner, with the last kick of the ball, deep into stoppage time.

As they walked back to car Andy asked Jim: “What did you think?”

“It was a full-scale disaster” said Jim. “One of the worst capitulations I’ve seen. Why what did you think?”

“It was brilliant” crowed Andy. “I thought it was one of the best games I’ve seen”

Hold the phone! What just happened? Two people, who had just watched exactly the same game, had come to such wildly different conclusions. How can that be?

Everything they had seen had been identical. And they’d viewed it from an identical vantage point. But here they were at complete loggerheads about what they saw.

Of course, the answer is simple. We all see the world through our own eyes, and we all see it differently. And the conclusions we reach are based on our beliefs.

We all like different music, we’re attracted to different people, we have different taste in clothes, and hitch our wagon to different football clubs. All based on our beliefs.

Value is based on our beliefs

On the way back to the car, Andy and Jim stopped off at the Man City supporters’ shop. The new home kit for next season had just been released and Andy wanted to take a look.

As he held the shirt up, he didn’t allow the thought to enter his head that next season’s kit looked almost exactly the same as this season kit. That would have led to the question:

“So why the hell are you going to shell out fifty hard earned pounds on it?”

Instead he held it up and pictured himself at the ground, wearing the shirt for all to see, with the name Aguero and the number ten across the back. He could barely contain his excitement as he whipped out his credit card. In just a few minutes it was his.

Jim looked on bemused:

“Fifty quid?” he exclaimed with a look of disgust on his face that’s normally reserved for when he’s followed through. “I wouldn’t give you 50p”

“Do you know what” Andy fired back, “I’d have paid double”

There go those beliefs again, except this time they’re doing something a bit different. They’ve helped Andy to create a story in his head that has made the Man City shirt valuable to him. Jim’s beliefs don’t agree. He can’t conjure up any value at all.

The value of the Man City shirt has nothing to do with the product. It’s not about the quality, the fit or how easily it will wash. The value is entirely about the story that Andy is telling himself.

Value is created entirely by the story your prospect writes in his head.

Sorry product managers. If you assume the value comes from how clever your product is, then your screwed before you start.

There is no value in any product or service that isn’t given to it by your prospects.

People’s perception of value changes when the story changes

Fast forward a year and Jim is back in the Man City Supporter’s Shop looking at a City shirt. You know, the one he would give you 50p for.

In the last twelve months since we last looked in on him, his grandson Tom has started growing up and is now six and an enthusiastic football fan. Of course, Jim did all he could to ensure he was a United fan, but Tom’s dad Mike is a City fan and he got there first. Tom is a confirmed sky blue and all he talks about is Man City.

So, when he was sitting on his Grandad’s lap and Jim asked what he wanted for his birthday, without hesitation Tom said:

“A Man City shirt please Grandad”. A request that was followed by a big hug, some wide blue eyes, and a heart melting like ice in the sun.

So as Andy held the shirt up, all he could picture was Tom at the ground, wearing the shirt, with the name Aguero and the number ten across the back, and grinning like a Cheshire cat. He could barely contain his excitement as he whipped out his credit card. In just a few minutes it was his.

He temporarily parked the belief that said I hate Man City and their shirts are worthless, and he filed it under “inconvenient”. It was momentarily replaced with a new belief that said: my grandson is the apple of my eye. I’ll do anything to please him.

Different beliefs, different story, different value.

Value is created by the story our prospects write in their heads. It all about perception. But perception can change as circumstances change, and when it does, how we value things changes.

If we think value is a fixed mark based on what we put into a product or service, we’re doomed.

Value is entirely created by the story our prospects write in their heads, and there is no value in any product or service that isn’t given to it by our prospects.

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