lessons from Steve Jobs

The North American consumer is addicted to low prices when it comes to plenty of kinds of consumer goods, but companies are wise to heed Guy Kawasaki’s strategic advice: price isn’t everything – and value is different from price.

Writing recently on what he had learned from Steve Jobs, Kawasaki wrote that “Price is not all that matters-what is important, at least to some people, is value. And value takes into account training, support and the intrinsic joy of using the best tool that’s made. It’s pretty safe to say that no one buys Apple products because of their low price.

Apple is far from the only company that has profited by providing value for its customers rather than a single-minded focus on the price tag.

Nobody buys Prius cars because they’re cheap – even with government subsidies, these eco-friendly cars that are tapping into a style-conscious and green-minded consumer are not inexpensive. And think about how much people are willing to pay for Hallmark cards, simple paper products, that can go for $5 or $6 each. Cost-conscious buyers could pick up a whole box of cards at a dollar store for the same price, or even send a message for free with an eCard, but Hallmark’s well-written passages keep drawing people back for more.

What is the value that you are providing for your target consumer? The question will keep popping up when:

• putting together your business plan
• hiring employees – how will your people help create the value you want to offer? Specialized skills that your competitors don’t have? Customer service?
• understanding your company’s strengths and weaknesses. How does the value you help cover over the gaps?
• presenting to investors. Does your PDF presentation talk about the value you’re offering? What pain point are you helping your customers with?

You can’t entirely neglect price. It’s an important part of your overall business plan. But as Kawasaki would point out, taking part in a race to the bottom in terms of pricing hasn’t helped virtually every Apple competitor overcome the giant’s value proposition. While they’re struggling to achieve profit margins of 5 to 8 percent, Apple’s profit margin is closer to 30 percent – and that’s the value of focusing on value.