Imagine yourself in a bustling market in Marrakech, surrounded by vibrant textiles, intricate metalwork, and the aroma of exotic spices. As you ponder over a beautifully crafted leather bag, you find yourself doing a familiar mental calculation: “How much would this cost back home?”

This moment crystallized a fundamental truth about how we perceive value and need — they’re entirely relative.

As pricing strategy experts Blair Enns and Jonathan Stark often emphasize, value is entirely a construct of the mind. When we’re in a foreign country, we instinctively compare prices to our home market. A $5 street meal might seem like a steal in New York but extravagant in Southeast Asia.

But this relativity extends beyond just price — it applies to our perception of need as well.

Think about your current wish list. Maybe it includes a new laptop, a vacation, and a gym membership. How do you decide which one you “need” most? You’re likely weighing each against the others, considering factors like:

• Intensity of desire: Which item do you daydream about most?
• Level of pain: Which current situation frustrates you the most?
• Frequency of thought: Which item crosses your mind most often?

This mental juggling act is happening constantly, often subconsciously, shaping our buying decisions.

So, what does this mean for product developers and marketers?

1. Context is King: Understand the broader context of your customers’ lives. What else are they considering buying? What are their other priorities?
2. Frame Your Value: Don’t just state your price – frame your value relative to alternatives, including the option of doing nothing.
3. Tap Into Emotions: Engage with the daydreams and frustrations of your customers. Make your product the star of their mental movie.
4. Create Comparison Points: Like my impromptu price comparison in Marrakech, give customers favorable points of comparison for your product.
5. Understand Sacrifice: Recognize that choosing your product often means not choosing something else. Make the trade-off feel worthwhile.

In “I Need That,” we explore how to create products that feel necessary, not just nice to have. Understanding the relative nature of need and value is crucial to this process.

Your challenge: Think about your product. What alternative uses of money or time are you competing against in your customers’ minds?

How can you position your offering to win that mental competition?

Here’s to creating value that transcends price tags,

Laurier

P.S. Have you ever had an experience where your perception of value dramatically shifted? I’d love to hear your story!