Of course, the short answer is, “What someone is willing to pay me.” This is a remarkably simple and accurate statement. And when the question refers to your products and services, how often is that answer followed by, “And that seems to be less and less every day.” So how do you change that?
When a company lacks purpose and vision, there is no forward movement toward value creation. The products and services become average; a commodity that can compete only on price. Most ad agencies love these clients because they rely on “rebranding” and huge ad spends to try to drive growth. But this only puts off an inevitable demise.
Visionary leaders start with purpose (skopós) and vision, surround themselves with the right people and create value with a passion for continuous innovation and improvement. They don’t compete on price, they compete with themselves to be better executioners of their vision and better value creators everyday. Their products and services don’t need a “big idea” marketing gimmick. They market by accurately communicating the value to those who can appreciate and benefit from it.
Apple, Starbucks and Patagonia did not develop a cult following by competing on price, nor will you.
As I write this, there are 36,765 cars listed within 50 miles of me on Cars.com. The prices range from $495 for a ’96 Ford Windstar to $209,500 for a used 2012 Bentley. Both will get me back and forth to work as will the 36,763 in between. One of them is the perfect balance of value and price for me. The greater the value to me, the greater the price I’m willing to pay. There is someone (not me) for whom the Bentley is the perfect balance. Similarly, I can buy a Chinese watch online for $3.02. I can choose to support American workers and buy a Shinola watch made in Detroit for $500. Or I can spend $180,000 for one of 30 watches made each year by the Gronefeld brothers in Holland. They’ll even fly here to take me out to a nice dinner and present the watch to me. Each of these watches tell time but each serves a different purpose for different people beyond telling time. Each of these watches are worth exactly what someone is willing to pay for them.
If you want massive profit growth, you need to create massive value. Get out of the commodity business and into the value-creation business. It’s at the core of what we mean by Profit With Purpose. It’s a process and a commitment but the rewards are more than just monetary.