The Most Important Lesson in Business
What’s the most important lesson in business?
Answer: making your customers feel as they are receiving more value than what they are paying for.
If a customer gives you $10, you have to make them feel like they are receiving at least $20 in value.
Well here’s one of the most interesting studies I’ve ever came across in my business career.
Financial analyst performed a study with focus groups consisting of two people (Person A & B).
Here’s were the rules:
Person A was given $100 and had to decide how to split the money with Person B.
Person A could decide to split the money $50/$50, $60/$40, and so on.
Person B could then either accept the deal or decide that neither would get any money.
Every time that person A split the money evenly ($50/$50), person B would accept.
Most of the time that person A split the money $60/$40, person B would accept – but not always.
As soon as the split began getting to $65/$35 or $70/$30, person B would deny the offer and no one would get any money.
Isn’t that interesting?…
Someone would walk away from a FREE $30 or $35 just because someone that they didn’t know was getting more value than them.
If that’s not the most important lesson in business, then I don’t know what is.
Let’s go over that again, person B refused free money when person A was getting more than them.
Do you understand the message here?…
If customers feel like they are not receiving higher value than what they pay for, chances are they won’t buy!
The financial analysts then thought that this probably happened because the study was performed in the U.S. were $100 isn’t much these days.
They decided to go and do the study in a third world country where $100 is a couple months rent for most people.
And guess what my friend? The same thing happened!
Person B walked away from free money when the split wasn’t even.
People in third world countries would walk away from a free $30 – $40, which is probably a couple months salary, just because they can’t stand the fact that someone is getting the better side of the deal.
How willing is a potential customer to give you money if you don’t communicate value?
The most important lesson in business is providing value, end of story.
So what is value? Something that will continue to assist your customer’s over time.
- Information and Education
- Low wattage light bulbs
What do all these things have in common? They all provide long term results.
When you provide long term results, you build trust with customers.
Information and education will assist someone forever.
Insurance, a microwave, and low wattage light bulbs saves people money, forever.
Take a look at the product or service you have or plan to offer and ask yourself, “Will this continue to assist my customer’s overtime or just temporarily”?