Want to Raise Prices? Tell a Better Story
As a business owner, you probably believe that quality is what drives consumers to buy your product. Certainly, superior execution and customer service go a long way toward making your business a success.
But when it comes to charging money for your product, customers will pay more for one thing: A good story, writes Ty Monague, author of True Story: How to Combine Story and Action to Transform Your Business.
Consider this annecdote presented by Montague in a blog post for the Harvard Business Review:
Back in the summer of 2006, New York Times Magazine columnist Rob Walker was mulling the question of what makes one object more valuable than another. What makes one pair of shoes more valuable than another pair if they both deliver on the functional basics of comfort, durability, and protection? Why does one piece of art cost $8,000,000 and another, $100? What makes one toaster worth $20 and another worth nearly $400 if they both make toast?
As Walker turned these questions over in his mind he concluded that it is not the objects themselves, but the context, the provenance of the objects, that generates value. In other words, the value isn't contained in the objects themselves, but in the story or the meaning that the objects represent to the owner.
Walker performed an experiment to test his hypothesis that stories sold products by buying up random knick-knacks--a wooden mallet, a lost hotel key, a plastic banana--worth less than $5 each. Then he asked writers to create a story that featured the object in some way, lending it human context.
Finally, he put the objects up for sale--along with their accompanying narratives--on Ebay. Even Walker was surprised by the results.
"On average, the value of the objects rose 2,700 percent," writes Montague. "That's not a typo: 2,700 percent."
A miniature jar of mayonnaise purchased for under one dollar, was suddenly worth $51. A cracked ceramic horse head, originally priced at $1.29, sold for $46.
Which, if you think about it, actually makes sense. You probably already know that developing a good narrative for your business is key to generating traction in the market place. Walker just demonstrated that customers love an innanimate object with a good story, too.
And for those still skeptical about the power of the pen, you may want to consider this: Walker's experiment--and corresponding magazine column--was so popular that it has been replicated five times. It has also been made into a book.
"Walker's experiment reminds us in a clear and extremely tangible way how the concept of value works in the human brain: a can opener is a can opener is a can opener until it is a can opener designed by Michael Graves and a part of the permanent collection of the Museum of Modern Art. A shoe is a shoe is a shoe until it is a pair of TOMS shoes," concludes Montague.