So now you’ve defined your customer, from the hundreds of millions down to the 1,000 true fans, you might be a little worried about how, exactly, you intend to create value for all of them. You can stop worrying right now.
Yes, there are probably 7 billion ways – as many people as there are on the planet – but there are also only two. You can pick one of them, as one of them is generally enough, or you can, if you’re really good and confident, pick both.
- You can be cheaper or
- You can be better.
You really don’t need to be anything else. In fact, you probably can’t be anything else. That’s it. Those are your only choices right there.
While that might seem overly simplistic at first, give it a little thought and you’ll realise that it makes perfect sense.
Remember that we have to understand our customers, and their thought, so let’s think through what we’re asking them to do. We are asking them to give us money in exchange for our product or service.
Whether consciously or not, they want to maximise what they get from their money, which means that what they buy has to be either cheaper (so they have more money left after buying it) or better, so that they enjoy it more, or it does more for them, than anything else they could buy.
Cheaper or better.
They are the only decisions a customer can make. They can choose to get more of something for the same money (cheaper) or a better service/product for the same money (better). If those are the only choices they can make, then those are the only ways you can create value for them.
It won’t always be your choice however. As we’ll discuss soon, some industries, and some functions within other industries, are really only able to be cheaper, because that’s all their customers want.
But don’t let that confuse you into thinking that’s the only way to be. Don’t let customers saying they want “cheaper” trick you into thinking that’s what they really want. Very often people who say they want cheaper, don’t buy the cheaper thing, and buy something more expensive.
Do you always buy “cheaper” or do you often buy “better”? Don’t answer what you think you do, or hope you do: what do you really do?
Let’s look at cheaper or better in more detail now, but before we do, answer these quick questions: