Profiting From the Perception of Value

Jun 28th

People in other countries living on more or less money may be willing to do a lot of work for what you consider next to nothing due to the associated purchasing power parity.

In Shoemoney's interview of Lee Dodd (also congrats on the recent addition to the family Jeremy) they both stressed the value of holding contests or creating user badges as a way to leverage perceived value or create value out of virtually nothing. While being rather poorly set up, recent award programs have done exceptionally well.

Google may not even realize how screwed up their search results are because they hold a flawed or blinded perception of value and they ignore important feedback. All search algorithms are just a way of interpreting or perceiving signs of value. Building a real brand requires creating a perception of value. To profit greatly you either need to build a brand, find flaws or underpricing in other's perception of value, or predict how markets will change and have the guts necessary to place a bit bet on your intuition.

To sell for the cheapest price there are usually hidden costs, like: accounting fraud (Enron), increased risk of prostate cancer (possibly rBGH - makes me not want to drink milk at all), not listening to customer complaints (Google search quality, Paypal account reps for people who do $100,000's in Paypal transactions each year), poor customer support (Verizon DSL, Verizon DSL, Verizon DSL, Verizon DSL), etc.

Sometimes those hidden costs cost you far more than you make from them. People tolerate stuff for a while, then eventually a consumer creates a (yourbrand)sucks.com site or two and suddenly you are worried about what one irrational person does, when the irrational thing was expecting nobody to notice or mention your hidden costs, business warts, etc.

And the product price point matters too because your price point not only determines how many units you will sell, but it also helps determine how much support you can give with your offering, and the average quality of your consumer. Aim for the low end and that is just what you will get.

Telling a story about the value of your product and then adequately pricing it or overpricing it while following through on your offer is a much better way to profit than to fill your product with hidden costs and screw people over.

I just finally got unsick today (what are the odds of getting sick at a concert crammed with 80,000 other people hehehe), so I will be catching up on email tonight.

What are some easy perception of value points you could be using to create business models or authoritative linkable content that will make search engines and/or people more likely to perceived your site or business as being important?

Published: June 28, 2006

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Comments

June 28, 2006 - 8:39am

Glad to hear you are now unsick. I still have 1-2 days left of it I think.

The other problem when you go for price vs overall value, you have to make up the difference in profit per sale/signup in volume, which increases your chance of something going wrong.

June 28, 2006 - 2:41pm

1. Paint one thousand blue numbers on canvas (www.onethousandpaintings.com)
2. Have Seth Godin write about you (The "Sethlets" will follow)
3. Put a timer on it indexed to price/units sold to create urgency.

Have people like me buy one (couldn't resist). Multiply by a thousand.

June 29, 2006 - 6:25am

/random re: MILK

What other Mammal keeps drinking milk after being weened? None! We're not meant to drink it at all. It's totally wrong.

peach
July 1, 2006 - 9:55am

It's Lee Dodd, not Dobbs ;)

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