“Such a great value!” exclaims an announcer on television. Wal-Mart value, Target value, Walgreen’s value, McDonald’s value, even Applebee’s value has come to mean low price. But that’s not really true. Value is actually a delicate balance between function and price, with price weighing slightly more than function.
When a person buys something, the value proposition is always (and I meant to say always here), always based on their perceived understanding of the function of what they are buying and the price they are spending for it, where those two perceptions are closest together.
If that balance is disrupted, the sale will not take place. As an example, if I told you I have a Rolex for $19.99, the value proposition is off. Thoughts like: “Is it stolen? Is it a fake?” come to mind. Everyone knows that a Rolex can’t be had for that amount of money.
Conversely, if I advertised a 1974 Ford Pinto, even if it’s never been in a fire for $48,000.00, the value equation is off the other way. A Ford Pinto will never be worth anything near that amount.
The trick for business owners, marketers and the like is to push their value proposition up by helping customers understand their function better. In other words, a great marketing program should get your customers to pay more for your stuff more often and like it better. To do that you need show how your function benefits your guest.
Every day another business succumbs to a low price apparition by thinking they can compete in the everyday low price game. The sad fact is, if you’re a local, independent restaurant operator, your chances of competing on price against Subway, McDonald’s or any number of other chain restaurants is nil.
But there is hope. None of the low cost leaders really ever talks about the great taste of their products. They just talk about how cheap it is. Your chance to compete is in the value of what you offer. To describe your products and atmosphere in a way that will get your guests in more often requires two things: A great marketing mind and a great creative team.
Poetry leveraged around the right point of difference is unstoppable. And it just might be your only hope!
And by the way, what did you pay for popcorn the last time you went to the movies?