My definition of value

Value is what is valued by a definite category of people.

The difference between product's value and offer's value

We have the following formula of value:

Value = Benefit – Expenses

But why do we value so much the objects which were extremely hard to receive or which cost so much?

We value our victories which were very hard to get. We value expensive cars, clothes or any other articles. Imagine if your expensive camera would be broken. Will you regret so much if you’ll broke the cheap one?  It seems that expenses by themselves represent value.

Therefore we have another formula:

Value = Benefit + Expenses

How we can distinguish which formula to use. I suppose it will be fair to divide the value concept into product value concept and offer value concept.

Offer's value      = Benefit – Expenses

Product's value  = Benefit + Expenses

If we have 2 offers for the same camera: one is 1000$ and the other is 500$ what offer would be more valuable to us?   

 

If we’ll use the 500$ offer the value of the camera would be decreased because the expenses will be decreased. But the value of the offer would be increased because of the same reason. 

Your target audience satisfaction or your target audience success?

Although these two concepts are strongly correlated and often jump together there is still a big and important difference. People from your target audience can be satisfied with you but it doesn’t mean that they will succeed with your help. And vice versa: they can succeed but not feel satisfaction. 

Let us say a teacher conducts a lesson for a student. The teacher can make a performance from the lesson: he may amuse the student, make him laugh, talk with him about different topics which not related to the subject

Some patterns don't change over time or wisdom from the past

One of the most prominent thinkers of the 18^th century, Philip Dormer Stanhope, 4th Earl of Chesterfield (mostly known for his "Letters to his son") made multiple intriguing observations concerning people’s conduct in the society. I’d say many of his thoughts answer the question about how to be valuable for the people you are interested in (i.e. your target audience). 

I’d like to place here some of the most valuable quotes from “Letters to his son”.

  

Addiction

Recently I watched “Star Trek” series. In one episode there were two worlds which had remarkable economics relationship between each other. People from one world were producing nothing except a narcotic drug for the people from the second world. People from the second world were giving everything they could produce to the people from the first world in exchange for the narcotic drug.    

What a wonderful value creation by the people from the first world!

Of course it’s an awful immoral example but there is something about it. Most people need some kind of drugs and not

What do people need?

According to the material from Wikipedia we have several fundamental needs and all other needs are the derivatives from these fundamental ones. So when we try to find special needs of our target audience we should start our analysis with the fundamental needs. 

Let’s consider the example. What are fundamental needs of science fiction consumers?

First of all they have common needs with the consumers of other genres. And the main need is leisure. They want to receive emotions which they lack in their real lives. They want to

How to be valuable

1) The main question is valuable to whom? Value can’t be in vacuum. We can’t be valuable to everybody. First of all we should determine our target audience. We should determine it precisely. Is it your friends, family, employer, fellow citizens, beautiful women, wealthy men, fans of you favorite team? May be it’s your customers?

Of course there can’t be a single target audience. That’s why the next step is to prioritize them. Can we spend the same amount of energy and resources for everybody? I hardly believe it. You’ll always have to make choices between spending yourself for one or another group of people. How will you spend your free time? Will you spend it doing extra work at your job or taking care of your family? May be you’ll spend it on participating in your friends’ activities or you’ll choose improving your skills by attending some courses?

So if you want to be valuable first of all you should distinguish definite groups of people (or separate persons) to whom you want to be valuable and then prioritize them.

2) The second part of creating your value is to understand the needs of your target group. What are their wishes? What are their problems? May be they have problems which are unknown for them yet? May be they have needs which they haven’t understood yet?

Always explore the needs of your target group.

3) May be the most complicated and hard stage of value creation is the needs fulfillment. That’s why we should understand clearly what we are able to do to satisfy our target group’s needs.

We should analyze the resources which we have (time, skills, experience, knowledge, friends and so on).

Understand how you can fulfill the needs of your target group.  

4) The next move is communication. How will people find out that you can fulfill their needs?

Why they should trust you? Do they understand correctly what you can do for them? Are they attracted by you?  There is a great number of such questions arises when we speak about communication. We should use instruments of communication to inform people about our value for them. Our value itself exists only in minds of people. Communication is the crucial part of value creation.

Communicate with your target group.

5) How can we understand that we are valuable? How much is our value? Is it the number of smiles we gain? Is it the certain level of delight we raise in people? If we break up with our partner what problems he or she will encounter? Or what sum of money we get for our service?

Measure and estimate your value (not obligatory in digits of course, use your intuition).

6) We can raise our value by understanding the needs of our target group and by the means of communication but the value wouldn’t last long if we can’t satisfy the needs.   

Fulfill the needs of your target group.

All these steps are easy to understand because they are dictated by common sense. But if we look closer at each of them we’ll see that the endless number of questions arises. And the deeper we look the more questions we get.   

The purpose of this blog is to explore each step of value creation. How to be valuable? Isn’t it a curious question? 

7) But all previous steps would be not very effective if there would be somebody who do it better then you. So the greatest value can be created if you carry out the following: 

be the best one in the needs fulfillment if you have the reasonable chance to be the best. But if you have only a small chance to be the best it is better to look for another options.  

find some special needs of your target audience that nobody else sees or interested in their fulfillment. Be the only one who can fulfill some special needs.