Value in the Eye of the Beholder
In a 60 Minutes story broadcast in 1973, an astonished Morley Safer was told that a Saudi prince and his three bodyguards were traveling to Syria aboard the Orient Express “to shoot swans with a chromium-plated submachine gun.”
In response to an article of mine in my No B.S. Marketing to the Affluent Letter, a No B.S. Inner Circle Member sent me this note:
I have to confess, we worry a lot at our company about pricing. So I was astonished to find out about Williams-Sonoma’s prices: for Halloween Caramel Apples … miniapples, no nuts, set of four, “only” (!) $29.50 plus $7.50 shipping and handling. Or a larger single apple, with or without nuts, $19.50. For ONE apple! Plus $6.50 s/h. Or your own personalized Halloween cookies, three cookies, $24.00. You could combine the apple and cookies at $43.50. For a discount on shipping, buy $150.00 worth. Though I am appalled, it appears that there is a large enough set of people for and to whom these things appeal, as Williams-Sonoma does a very good business. Reaffirms the adage that “you are not your customer,” or perhaps more accurately, “you are not necessarily your customer.”
That you are not your customer is an astute observation and brings me impetus for a very important discussion.
First, note that Williams-Sonoma® is a cataloger focusing on the mass-affluent, not ultra- or super-affluent. Its products are routinely purchased by hundreds of thousands of households with an annual income in the $100,000.00 neighborhood. The $19.00 apples are NOT being nibbled on by only a few eccentric multimillionaires who also clean their eyeglasses with hundreddollar bills. It is VITAL that, through this book, from catalogs like Williams-Sonoma’s, and as many other sources as possible, you get, accept, embrace, fully internalize that the mass-affluent class of consumers in America is spending like crazy on premium-priced luxury goods and services, buying all manner of things that will shock you. (I recently reserved a suite at a Disney® hotel—where families go on vacation—at $1,800.00 a night, and it was the last of two remaining rooms in the entire hotel in January.)
Second, of all possible reactions to discoveries like these, being appalled is least appropriate. Let’s consider the reasons somebody might be appalled (my subscriber didn’t enunciate his). One would be the “children are starving somewhere” idea, that if people didn’t pay $19.00 for caramel apples, somehow starving urchins somewhere would be fed and cared for. Gee, if it really were that simple to solve poverty and world hunger, I’d give up my $19.00 apples and my luxury SUV and my $800.00 cowboy boots tomorrow. But that’s just not how money really moves around, how wealth or poverty is caused or affected, and I’d refer anybody wrestling with that idea to my No B.S. Wealth Attraction book. Until you come to grips with the truth about prosperity NEVER being a zero-sum game, where one person’s wealth or, by your judgment, waste deprives someone else, you are hamstrung, handcuffed, hog-tied mentally, emotionally, and practically in your own attraction of wealth. The supply of wealth to which all have ready access based exclusively on their own chosen behaviors is not a debit-credit system at all. This is contrary to what 95% believe to be true about money, but it is not coincidental that 95% have comparatively little while 5% have most of it.
Or somebody might be appalled at the wretched excess, the foolish spending. I’ve been broke; I have a gut-level, visceral reaction to what I judge as waste. But that imposes your value judgments or mine on others. A devout atheist opposed to all religion might very well view your $20.00 put into the church collection plate en route to the Vatican with just as jaundiced an opinion as your critical view of his purchase and enjoyment of a $20.00 apple. One man’s wretched excess is another’s highest and best value.
There are better (more profitable) reactions than being appalled. One is to use this information as fodder for your own continuing inner thoughts, dialogue, and (probably, hopefully) reorientation of your understanding of price, value, consumer behavior. Another is to be inspired and motivated, to re-examine your beliefs about your own customers’ or clients’ attitudes, spending, interests, and passions, and to search for opportunities to 1) design and offer premium-priced goods and services (options or levels) to your present clientele and/or 2) seek out a clientele that places price very low in its list of Buying Decision Factors. (As an example of that, imagine how many restaurant owners, grocers, gift shop owners, and so on will read this chapter but will never bother to go to www.SRDS.com, find the Williams-Sonoma mailing lists, contact the list manager, and rent the best Williams-Sonoma buyers they can in their area to promote their businesses to!”
Back to understanding value: No, a $19.00 apple a day won’t keep doctors at bay any better than a $1.00 apple, at least as a result of its nutritional properties. (It might, based on its effect on the consumer’s positive attitude. But that’s not my principal argument here.) The value that motivates the Williams-Sonoma buyer to pay $19.00 for the apple is not in the apple at all. It may be in the impact of it given as a gift or served at a party. It may be in the feelings of success or prosperity or of rewarding oneself with indulgence that comes with making the purchase (even before ever taking a bite of the apple). It may be a sense of superiority, of buying or serving the best or something unique and unusual. Bragging rights: It’s a trophy apple, because, after all, we can’t really frame and hang our bankbooks on the wall for all visitors to see, so instead we opt for other visual representations of our achievement and success: trophy car, trophy house, trophy watch, trophy wife, trophy apple. It may be the time saved and convenience of ordering from the catalog rather than schlepping off to a gourmet store across town. It may be all those things. It is certainly mostly emotional and psychological, not practical. Thus, the $19.00 apple may very well contribute to the person’s emotional well-being in ways a grocery-store apple cannot.
When I was young and poor and insecure, just starting in business and routinely asking older, more successful people to give me money, I bought and drove fancy Lincoln Continental Town Cars. And I always flew first class—at the time the only young kid up front, surrounded by 50-year-old executives. I didn’t drive the car or fly first class for its impact on others; I did so for its impact on me, for its programming of my own psyche. Neither the value of the car nor that of the first-class tickets for me had anything to do with getting from place to place. The value to me was purchased confidence and feelings of parity and belonging, of having arrived where I was actually trying to get.
Personally, I don’t wear a watch at all. Years back, I owned and wore a Rolex® and a TAG Heuer®, but such things no longer interest me. But I pass no judgment on the fellow who wears one or ten and proudly flexes his cuffs at every chance in order to display them. I also understand that the different motivations different people have at different times of their lives for paying $5,000.00 or $50,000.00 for a wristwatch having nothing whatsoever to do with their need to know precisely what time it is. For that, of course, a $50.00 Timex® will do just fine.
The most successful marketers learn not to question how the public or their customers get value—only to strive to find out about it, recognize it, and capitalize on it. To be of service means offering and delivering what customers value; that’s the role of the businessperson. Should you feel a need instead to impose your value criteria on others, you ought to exit business and enter politics or ministry.