If you have a business that focuses on customers, consumers, or as they’re often known by non-businesses, people, then focusing on better is better than cheaper.
People want better more often than they want cheaper. They may say they want cheaper, but as Henry Ford so famously said, “If I had listened to my customers, I would have built faster horses.” Customers may not know they want better, but what they buy is nearly always better than it is cheaper.
Let’s clarify something first. We do not mean quantifiably, objectively better. The better that means it’s bigger, or lasts longer, or offers some other form of “more” for a higher price. That’s just another version of cheaper.
Look how companies buy things. Companies need to focus on “cheaper” or “quantifiably, objectively better”, because the focus of a company is profit. Companies are not consumers, customers, or humans, even though they are made up of them. When a company buys something, it is to do a specific purpose, and that is to help it make money. The cheaper or better they get had better help it make more money, or the business won’t last long.
Now look at how humans buy things.
- They pay more for shirts with brand logos on them, because they think they’re better. Or they think other people think they’re better, and more expensive, so they think other people will think more highly of them.
- They pay more to eat in a restaurant with candles and tablecloths.
- They shop more often in a shop where the shop assistant is friendly.
What better really means is different, and different in a way that some people prefer. If you can differentiate your product or service in a way that your customers appreciate, then you have the start of a business model. That’s it.
Here’s a spicy example: if you think that all the local curry restaurants make curries that aren’t spicy enough, and you know how to make them extra spicy, then maybe that’s all the differentiation you need.
Is it better? Objectively, no!
There will be some people who think your spicy curry is inedible because they have become used to eating mild curry, but if there are enough people who agree with you that a spicy curry is a better curry, then you’ll have a “better” business model. (You might also be able to use “indirect value capture” [link] by selling more beer to customers who need to cool their mouths down!).
It’s the beauty of starting a business whose target market is people rather than businesses. People customers are subjective, they like different things, while businesses try as hard as they can to be objective, and go for cheaper so they can make more profit.
When a customer makes a decision like that, they sometimes try to be objective, or rational, if they think an economist is watching (that’s an economics joke, which is why it isn’t funny), but more often than not their decision is entirely subjective.
First, who can make all the calculations needed to know whether A is better than B… to Z, to Z times 100 of all the things that we are being offered at any given time? Second, as with the spicy curry example, one person’s “better” is another person’s inedible. There’s just no way of being objective about these things.
Better, when it comes to humans, is very rarely objective, which means your business might be better, just because it’s yours. Yes, it might be better just because of you.
Don’t knock that last idea, if you’re the kind of humble person that is shy about starting a business precisely because you don’t think you would make it better. Very often, successful small to medium-sized businesses are successful because the person who started them is popular. First of all popular with their customers, and then popular with their staff as the business grows. And it’s often shy, humble business people who work extra hard to make sure their customers and staff do like them.
Your business might be better to your customers just because you are doing it, and not someone who doesn’t care about them.
That’s the simplest way in which your business can be better, and has to be better if it is going to be successful. It might be better just because you care, and the value you create is “unreal“.