What are your customers buying? Seems obvious. People pay for the product. Or maybe they pay for the story and the product, or just the story.
All true, but can you be more specific?
I find myself on the Amtrak to Boston and keep asking myself why I chose this antiquated, a little bit slow, a little bit overpriced form of transportation.
On a Saturday I could reliably drive from my house to Boston more quickly (by about an hour) and more inexpensively. What I’m really paying for is the right to make a trade: I’m trading a car ride (three-and-a-half hours of driving alone, eyes on the road, fighting sleep) for 4+ hours of sitting comfortably, catching up on reading or work or just relaxing. And I’m willing to pay the cost of the train ride to make that trade.
If I’m like most customers (I may not be), then Amtrak, within reason, isn’t selling me the ride to Boston. That part of the product is clearly worse (slower, more expensive) than my other options. I’m buying the time, the relaxation. So Amtrak should be promoting the heck out of the fact that they have power outlets on this train (so I can plug in my laptop), and they should figure out how to get the Internet delivered too. Because Bolt Bus has both of those, and even if it takes a little longer than the train (when there’s traffic), it costs a lot less, has more frequent service, and it’s delivering what people are actually interested in buying. (I would have taken it but it was sold out for my return trip…go figure).
Drill a little deeper on what you’re selling and you’ll learn what people are really buying. This in turn will tell you where to invest and where not to bother.
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Sparked some thought here. Drill down to define yourself accurately.
Thanks
I’m taking a class from Clay Christensen, who developed the theory of disruptive innovation. He also argues that people buy a product because they have a “job to be done”, and they “hire” the product they think will best complete it. Here’s an article about the theory – very relevant to your observations here. http://hbswk.hbs.edu/item/5170.html
I love it…great to be inadvertently stealing ideas from Clay Christensen. I should contact those HBSWK folks 🙂
Sasha,
I apologize; I may have stolen that last seat on the Boston-bound Bolt Bus. I would prefer the train if only they could figure out that wi-fi issue…
Thank you so much for being a thoughtful, prepared panelist at the HBS Social Enterprise conference; some of the most insightful reflection came out of your discussions, and it was a pleasure to make your acquaintance!
Justin, that’s incredibly nice of you, and I hear you about the Wi-Fi. Thank you for attending the conference, and for tuning in to the blog!