In the past, much of the value associated with a particular purchase came from products and services themselves. It was the inherent, physical attributes of the fabric or the shovel or the food that people needed, and there weren't many options for obtaining it. But today, we can get almost anything almost anywhere. If I want a shovel I have a range to choose from: high-end alloys or traditional wood with a metal blade. I can pick the best blade shape for the job I want to do, and choose from a range of prices that, presumably, denote quality. I can also buy a shovel at a big-box store that carries diapers and candy or visit a specialized retailer that can give me information about shovel options. The value no longer comes primarily from the product itself — it comes from the value added to the product by entrepreneurs.
Apple Computer took existing computer technology and added distinctive aesthetics to plain beige boxes, building a design-oriented brand in the process. Build-a-Bear took stuffed animals off the shelves and added a profound experience to the process of purchasing and owning a common toy. Starbucks took a common beverage and made it special, adding value in dozens of ways: the atmosphere of the shop, a wide variety of hot and cold options, and so on. In every industry, entrepreneurs have found new ways to add value to existing commodities and transform typical products, creating multi-national corporations and new markets in the process.
Part of being a blank page entrepreneur is finding ways to create value in the mind for whatever products and services you offer. Ask yourself, “Can customers find my products and services elsewhere?” If the answer is yes, you must find ways to create cognitive and emotional value that separates your business from those others. How you approach this process depends largely on what kind of business you want to build.
Create Unique Value
Ever since explorers began bringing spices, weapons and fabrics from distant lands, consumers have been willing to pay extremely high prices for unusual items. But in today’s world of online and international commerce, offering things that are unusual has become a function of entrepreneurial creativity. When entrepreneurs develop innovative services or unique products, they create value by offering something that no one else can. As mass market options become stale, we look to individual entrepreneurs to create value by offering things that customers can't find anywhere else. (A good place to see this process in action is Etsy, an online marketplace that offers a large number of one-of-a-kind creations.)
Create Value With Emotion
One of the easiest ways for entrepreneurs to create value is by altering the emotional state of customers: increasing positive emotions and decreasing negative emotions. Part of the human condition is the need to feel more good emotions (pleasure, contentment, joy) and fewer negative emotions (fear, shame, loneliness). Viewing your offering in an emotional context is one of the best ways to use the skill of empathy to develop or enhance it.
Create Value By Upgrading Human Experiences
If you offer a product or service that responds to a basic need (hunger, thirst, health, clothing, shelter), create value by elevating a fundamental human need beyond its basic elements. This is the basis for much of our fashion, beauty, culinary and housing markets — adding value to the food, clothing and shelter we all must have to create remarkable dining experiences, clothing as personal expression, and housing that reflects how we want to live our lives. This type of value is not limited to the more expensive side of the market. McDonald’s creates a unique dining experience, just like an expensive steak-house. The value is not in the price, it’s in the deliberate creation of a brand around the physical experience of eating cooked beef in a restaurant. Procter & Gamble used this same approach to add value to another basic human experience….
Create Value By Restricting Customers
It sounds counterintuitive, doesn’t it? If your offering provides access to a place or an opportunity, you can create value by restricting admittance to a select few or offering a second tier of value that's available to just a small group. This kind of “velvet rope” emotional value has turned nightclubs into must-attend venues and enabled organizers to charge thousands of dollars for concert tickets. It’s created luxury boxes at sporting events and VIP lounges at airports. We long to feel special. We want to be part of a group. Even small businesses can use this approach to create value in the mind.
Create Value Through Aesthetic Enhancement
Do customers look at your products and services? Smell, hear, taste or feel them? If so, you may be able to create value by improving the aesthetic experience. Almost every product in your home has been evaluated in this way, and entrepreneurs have developed aesthetic profiles for groups of customers and added different forms of value to appeal to a wide variety of tastes. One example is motorcycles. Aesthetic enhancement has transformed this practical piece of machinery into something more like art, worthy of an exhibition in a celebrated museum.
Create Value Through Conservation
We all want more time and more money. We want to accomplish tasks with less effort and energy. This approach focuses on conservation – how can you help your customers save their resources or allocate them more effectively? Many small business owners create value by helping their customers save time, money, energy and other resources: everything from bookkeeping and cleaning services to child care and prepared meal delivery falls into this category.
Create Value Through Intellectual Engagement
An often overlooked method for creating value is to engage the mind more deeply. People love to learn, to think and to figure out, and inventive entrepreneurs can create value by engaging the mind through knowledge, intellectual stimulation, curiosity or other forms of cognitive engagement. Can you make a game of your product? Can you add value to your service by stoking the fires of curiosity? What can your business teach people, and how can that education create a deeper, more fulfilling relationship with your customers?
Entrepreneurs create value in the mind that can be exchanged for money. A butternut squash has a certain amount of value. Cutting and peeling it adds value, because the customer doesn’t have to perform those chores — it conserves a customer’s time and energy. If you take the time to roast it, put it in a stock pot with broth, add several other ingredients, blend it, balance the flavors and serve the finished soup with croutons, you add aesthetic value that can be traded for $5 or more per bowl.
Entrepreneurs must create cognitive and emotional value that can be traded for money, and those that do this job well will earn a return on that investment and develop a successful business.