Create value, your price will follow
How does Apple command such a premium price for its products? Well, I have been an Apple product user (an iMac for eight years, an iPad for five years and there are a couple of apple phone users too at home). At the time I bought the Mac, my family wasn’t sure if it was worth paying a super premium price for a product that they believed could be substituted with a normal PC running on the Windows platform. But now, I am sure they will recommend that the Mac be replaced only with another Mac when the time comes. Here is another thing, the Mac has never failed, hasn’t slowed down much, resolution continues to be amazing (it taught me what an HD quality could be much before it became common parlance) and the box looks as good as new. I received free upgrades to the OS till recently…when they discontinued for my model. It hasn’t required an anti-virus and the ecosystem that it thrives in does not warrant any third party software not authorised by Apple.
The credit to create a revolutionary product and user experience that revolved around a consumer goes to Steve Jobs. It is said that his attention to detail with respect to Apple products to create value well beyond a customer’s expectation is what drove Apple to what it is today (Till last week, it was the number one company in the world in terms of market capitalisation. A cash reserve in excess of USD 150 billion dollars leaves many bewildered). Sample this – he hated the fan inside a PC and thought it made the product clumsy….so he designed a motherboard to do away with it. The software was proprietary and the design was unique. This is what James Suroweicki wrote about Jobs in an article in The New Yorker in 2011,
“After his return to Apple, in 1997, he got personally involved with things like how many screws there were in a laptop case. It took six months until he was happy with the way that scroll bars in OS X worked. Jobs believed that, for an object to resonate with consumers, every piece of it had to be right, even the ones you couldn’t see. It explains why Apple products have typically had a feeling of integrity, in the original sense of the word”
Yes, it would have mandated a zillion hours of debates, discussions, occasional frustration, some head banging but the obsession to create superior value and patience to stay the course paid off handsomely in the end.
Here is a sales experience I would like to share.
More than a decade back, I was a business head for a magazine in the IT space. One of our front line sales staff came back with a sales objection – He narrated that one of the decision makers in a global MNC did not believe our magazine was read by the people we quoted as our core readers. He gave us a month to prove that our claims were true. The sales personnel took the initiative to call up at least 50 of the high profile readers (some he met personally too) and genuinely checked with them which section of the magazine they read and if it has helped them in their decision making cycle? He collated the answers (he even found out how many actually used or intended to procure the MNCs products in the near future). He created a reasonably good survey document, filled in the findings, mentioned the name (and relevant details) of the people he spoke to and submitted to the client. He encouraged the client to call up the people and verify his claims. The customer did actually have many of the entries verified….he even called up some others who our sales staff had not met or spoken to rule out any bias.
It was agreed that if we were proved right, the client would sign a contract at our asking price and here the sales person won – he received a contract that lasted quite a while, with investments only going higher each passing year.
Here are a few take aways,
Creating value is hard work: There is no two ways about that. So if one wants to showcase value, it requires investment of time, patience and loads of study.
Invest time in understanding customers: Customers have a lot to say and it is a good habit to hear them. Calculate what constitutes superlative or rather a delightful experience and do not compromise if you indeed have the winning formula
Invest time in breeding a culture to create value: Any and every personnel across the organisation should be obsessively tuned to think of creating value….it cannot be the duty of a select few.
About Suresh Ramakrishnan
Suresh has two decades of experience in structuring / creating new business and products / solutions in the media and content space. Among his various passions – writing, singing, reading, analyzing music and directing short plays occupy prime spots. He is a fitness freak to the core and a complete family man; prefers to spend his weekends in their company. He has an engineering degree from IIT – Kharagpur and a PGDM from IIM – Ahmedabad.