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Precisely, although choosing the value attributes that you 'skew' will depend on your market.
It's explained in better detail in the book.
In the purchase decision making process, we all (either consciously or unconsciously) have different factors that influence our purchase of a given product.
These factors are different for everything we purchase.
Take the example of taxis vs. Uber (or similar service).
What influences our decision to choose a 'get me from point A to point B' service? Well, lots of things. Price, speed, availability, riding experience, ease of getting the taxi, etc. You get the idea.
Getting a taxi sucks. You don't know the price, you don't know the speed, availability can be low (on their schedule), the riding experience sucks, you have to hail the damn thing and pray there's no one already in there... it's all around terrible. At the end, you still somehow pay more than you planned on paying even though you didn't know the cost in the first place. F*cking terrible experience all around!
Uber is different. You know what you're paying, you know exactly when it's gonna get there, availability is guaranteed within a timeframe, it's super easy to get one. The experience can vary from excellent to 'I'm gonna get murdered', though; but you can check ratings on a particular driver to determine with some reason whether or not that's the case.
Uber wins hands down, even though the company is terrible and they tend to operate on the line of legality.
---
To apply this to your business, you gotta first know (1) why people choose the product that you sell and (2) what attribute your product can/does skew. Let's say you wanna start a soap business. Soap is cheap (you can get it for a dollar) but there's lots of soap out there that sells for way the F*ck more. Why?
Well, people choose based on smell, on ingredients, on source of ingredients, handmade vs. factory made, what the soap looks like in the dish and plenty more. If you're demonstrably superior on one of these, you can sell soap for much more than a dollar.
Then there comes the competitive aspect of value skews. I explained the taxi/Uber thing, but it's not a great comparison in the real world because an Uber/taxi situation is quite rare and completely disruptive for an industry. In the real world, you have products and services that have hundreds of competitors, all with different value attribute skews.
Price is the most basic value skew there is. If you're the cheapest, you WILL get a segment of the market no matter what. For that to be the case, you need to win on the supply chain side. (Microecon 201). There are people who will always, and only, buy the $1 soap. I'm one of those people (except in the case of a gift).
With the hundreds of soap companies out there, where would my soap fit in? Well, maybe I could make the soap that smells the best + demonstrate that it's the case. Or, maybe my soap comes in the prettiest packaging and it can be given as a gift without needing to be wrapped. Maybe my soap is made from a rare ingredient only found in the Zambezi River, made right there by African pygmies (sustainably and without slave labor). Maybe it's infused with pheromones that will make you irresistible to BOTH sexes! Who knows; the possibilities are endless.
But you don't know the possibilities until you can estimate the attributes where value can be skewed. The communication of said skew may or may not justify the price point, and all you can do is try it out.
It's explained in better detail in the book.
In the purchase decision making process, we all (either consciously or unconsciously) have different factors that influence our purchase of a given product.
These factors are different for everything we purchase.
Take the example of taxis vs. Uber (or similar service).
What influences our decision to choose a 'get me from point A to point B' service? Well, lots of things. Price, speed, availability, riding experience, ease of getting the taxi, etc. You get the idea.
Getting a taxi sucks. You don't know the price, you don't know the speed, availability can be low (on their schedule), the riding experience sucks, you have to hail the damn thing and pray there's no one already in there... it's all around terrible. At the end, you still somehow pay more than you planned on paying even though you didn't know the cost in the first place. F*cking terrible experience all around!
Uber is different. You know what you're paying, you know exactly when it's gonna get there, availability is guaranteed within a timeframe, it's super easy to get one. The experience can vary from excellent to 'I'm gonna get murdered', though; but you can check ratings on a particular driver to determine with some reason whether or not that's the case.
Uber wins hands down, even though the company is terrible and they tend to operate on the line of legality.
---
To apply this to your business, you gotta first know (1) why people choose the product that you sell and (2) what attribute your product can/does skew. Let's say you wanna start a soap business. Soap is cheap (you can get it for a dollar) but there's lots of soap out there that sells for way the F*ck more. Why?
Well, people choose based on smell, on ingredients, on source of ingredients, handmade vs. factory made, what the soap looks like in the dish and plenty more. If you're demonstrably superior on one of these, you can sell soap for much more than a dollar.
Then there comes the competitive aspect of value skews. I explained the taxi/Uber thing, but it's not a great comparison in the real world because an Uber/taxi situation is quite rare and completely disruptive for an industry. In the real world, you have products and services that have hundreds of competitors, all with different value attribute skews.
Price is the most basic value skew there is. If you're the cheapest, you WILL get a segment of the market no matter what. For that to be the case, you need to win on the supply chain side. (Microecon 201). There are people who will always, and only, buy the $1 soap. I'm one of those people (except in the case of a gift).
With the hundreds of soap companies out there, where would my soap fit in? Well, maybe I could make the soap that smells the best + demonstrate that it's the case. Or, maybe my soap comes in the prettiest packaging and it can be given as a gift without needing to be wrapped. Maybe my soap is made from a rare ingredient only found in the Zambezi River, made right there by African pygmies (sustainably and without slave labor). Maybe it's infused with pheromones that will make you irresistible to BOTH sexes! Who knows; the possibilities are endless.
But you don't know the possibilities until you can estimate the attributes where value can be skewed. The communication of said skew may or may not justify the price point, and all you can do is try it out.