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You pay the price, but you get value

Co-founder & Chief Strategy Officer, Intercom

Des Traynor

@destraynor

Sometimes your customers know that you provide a feature they want, but for some reason, they don’t use it. Why does that happen?

It’s a value problem

You know you have a value proposition problem when you hear the following:

  • I just haven’t gotten around to it yet.
  • It’s pretty expensive.
  • I will once I get the time.
  • We can’t afford it yet.
  • That’s not important for us right now.

You’ve heard these before, right? They all mean the same thing: “I don’t see the value“. You see, cash isn’t the only thing businesses spend. They spend time and focus too.

Using your product or feature has to be worth the time, focus, and money. Money is usually the least of the concerns. $49 per month doesn’t mean a whole lot to a business dropping $20K per month in salaries alone—and that’s a very small business.

Money is usually the least of the concerns.

Solving a value proposition problem requires strong positioning. It comes down to how you sell your product, how you frame your offering. An Audi looks expensive at a car dealership but looks like a bargain at a yacht show. $29 a month is pricey for “5GB of file storage” but great value for “the certainty of keeping your family photos safe forever”.

The toothpaste industry only really took off when they started selling “beautiful teeth” as opposed to “prevention from gum disease“. We all know flossing is a good idea, but we’ve yet to hear a similarly compelling pitch for it.

Why should I buy your product?

Understanding why your customers buy your product is the key to positioning it properly. Is it “peace of mind for your most vital files”, “painless file-sharing for business”, or a “easy way to access your torrents”. All of these describe the exact same product, but they appeal to different people at different price points.

Real example: A friend was having no luck pitching a product as “all your online files in one place“. That sounded good but simply didn’t solve a problem people related to. She heard lots of answers like “This sounds great! I’ll give it a try in a couple of weeks”.

After digging deeper, she found a real pain point that her potential customers experienced quite often. She re-framed the product as “When your favourite app gets bought and shut down, we’ll have your back“. That resonated with her market. Not a single line of code changed, but all of a sudden this product was a painkiller. And people started buying.

Key idea: Understand that it costs more than just money to use your product. So when you’re asking your users to do something, frame it in terms of their needs and desires, not your features and bullet points.

Tip: Customers who have bought your product recently will describe it far better than you can. I’ll give the last words to a man far smarter than any of us.

=Peter Drucker quote: The customer rarely buys what the company thinks it sells him

Intercom on Marketing book