Value is not price. Value is something very personal. Each of us sees things very differently. There are those of us who look at a diamond and simply say, “well, a diamond is a diamond.” Then there are others who believe in paying the so-called blue box tax that comes with a Tiffany diamond. Simply put, they value a Tiffany branded diamond more than any other diamond from any other jewelry store.
We see the concept of value every time we observe an eBay auction. Auctions are one of the purest forms for determining value. Someone is selling something and all potential buyers have a price in mind. Often we spend more than the “retail value” for the item. Why? Why, would we spend more than what the retail value of an item is? Simple. We value it more. Perhaps the item holds “sentimental value.” Or perhaps the buyer finds value in getting the item before anyone else could.
One of the most interesting things I’ve seen in a while was Radiohead’s approach for distributing their album, In Rainbows. They made the album available for digital download and allowed consumers to pick a price they wanted to pay for it. Think about that. You could pay $0.00 for the album. You could pay $100.00 for the album. You, the consumer was allowed to determine the value. The pessimistic person might argue, who would pay anything more than $0.00 for the album. Well, based on real data, most consumers actually paid the normal retail price. At first, I was surprised. But, when you consider Radiohead’s strong following, it makes sense. Their fans…their consumers wanted to engage in a true mutual exchange. They didn’t want to take advantage of the band. Why? Well I think it’s because the band continually put out great music. Most Radiohead fans will tell you, there’s never been a bad album. The band has always delivered the goods. Perhaps, because the band had always provided value, the fans wanted to pay a fair price.
I imagine if Southwest and Delta let customers name their price for flights, most consumers would take advantage of Delta because of how many times Delta took advantage of them. I’d also imagine the opposite would be true of Southwest.
What would happen if you made your product or service available to consumers via a “name the price” model? Would your consumers pay retail? Would they pay more? Would they take advantage? If the majority of consumers elected to pay $0.00, what would it say about your brand or product?
You don’t see Rolex on Facebook engaging their staunch advocates…and believe me Rolex owners are true believers.
Head of Social Media at Walgreens. Interactive marketer, innovator, boat rocker, continuous learner, movie lover, risk taker, dad and all around good guy. I'm always up for a spirited conversation. These are my thoughts and ramblings, not those of my employer.
