As I’m assembling the slatwall components in my garage for this project I told you about yesterday, I have plenty time to think.

And, naturally, my mind goes to the product I’m installing.

Here’s an intriguing thought: the material and manufacturing cost of this Trusscore Slatwall product has absolutely NOTHING to do with its value to me.

What I need is a clean, aesthetically attractive, cleanable and STRONG material. This stuff delivers in spades.

It’s made of smooth, with plastic and screws into the wood studs every 16 inches horizontally and 6 inches vertically, with a claimed capacity to hold 75 pounds per square foot.

It’s going to transform my cluttered garage into an organized oasis for my future projects. In our reno plans we included the electrical for a TV, up high for a good sightline.

But, here’s the kicker: To make this PVC plastic paneling, it probably only costs the manufacturer a buck or two per panel. The cost to me? Thousands.

And you know what? It doesn’t matter.

I NEED this product to attain my Coveted Condition — that vision of a perfectly organized, efficient space that’s been winking at me in my mind’s eye. The truth is, I’d pay double what I did.

This scenario illustrates a crucial principle in product development and pricing:

The value of a product is NOT determined by its production or materials cost, but by the intensity of the need it fulfills. If I didn’t feel a strong need for this stuff, I’d never put in this much work to install it. And I wouldn’t even pay what the manufacturer did for the materials.

Consider these implications:

1. Understanding True Value: Your customers are never buying your materials or manufacturing processes. They’re buying into solutions to problems and pathways to aspirations.
2. The Power of the Coveted Condition: When a product helps achieve a deeply desired future state, price sensitivity often decreases dramatically.
3. Premium Pricing Potential: Products that genuinely fulfill intense needs can command prices far above their production costs.
4. The Importance of Positioning: It’s always key to communicate not just what your product is, but how it enables the customer’s desired transformation.
5. Quality as a Value Signal: High-quality materials and construction can justify higher prices by signaling durability and effectiveness.

In “I Need That,” we explore how creating a sense of genuine need for your product can transform your business. This garage project is a perfect real-world example of that principle in action.

Your challenge: Take a fresh look at your product, based on this concept of value. Are you pricing based on costs or on the value it provides? How can you better communicate the transformative potential of your offering to justify premium pricing?

Remember, when a customer truly needs your product to achieve their Coveted Condition, price becomes much less of an obstacle.

Here’s to creating products so valuable, customers would gladly pay double!

P.S. Have you ever bought a product that was expensive relative to its production cost, but you felt was totally worth it due to the need it fulfilled? I’d love to hear your story!