Monday, October 01, 2007

the happy haggle upwards

Why I'm sharing this embarrassing story I don't know. But it's a nice lead up to a conversation about value:

In 2004 I read an article in a UK newspaper about retro mobile phones. I was doing a lot of work for Motorola at the time and had already developed an interest in their vintage phones, like the StarTAC and the DynaTAC. The article told me these handsets were now worth about £50. Whether I thought about the money or whether this merely reignited my interest, I'm not certain. But I did go onto eBay and buy myself a beautiful StarTAC and a MicroTAC, still in their pristine boxes.
The following week I ran into a friend. I told him about my new toys and about the £50 price tag I had read about. He laughed and asked me where I read it. I told him and he laughed again. Apparently he knew the journalist that wrote the article. In fact, the article's author had phoned him up whilst writing it and asked: "how much do you reckon they're worth?" "I dunno," my friend replied, "about fifty quid?"

To spare me some embarrassment and perhaps partly because he believed it, my friend (whose name I'm omitting only because I don't want to tarnish the reputation of journalists) said to me: "Look Andy, things are worth whatever people pay for them."

He was right. I still deserve ridiculing (the comments button is below), but he was right. Things are worth what they cost us and this means we often value them more if we pay more. I recall hearing about some leather wallets being sold cheaply in WH Smiths, or rather not being sold. With such a low price, people didn't value them. Only when the price was doubled did they start selling. In some instances, we want to pay more for things. If something is free, it isn't worth anything to us.

Another example is one from my student days. I was in Tower Records and reluctantly rubbed away the foil on a scratch card the teller gave to me. Surprisingly, I won - and a minute later I was awarded ten new albums, free. I remember distinctly, walking away with all these albums and feeling a bit odd. I wasn't excited. I felt cheated, because I liked the ritual of saving money, making a choice and then living with that choice. In fact, to refer to Daniel Gilbert's Stumbling On Happiness (again) it's been proven that we subconsciously force ourselves to have more positive feelings when it's in our interest to. I.e. When we've paid for them and want to enjoy them more.

All this came flooding back when reading that Radiohead are allowing fans to choose how much to pay for their new album. This isn't the first time someone has had this idea. Songslide came up with it a while ago and research has shown that chosen prices are higher than expected. However, it's also clear that for the unknown bands on Songslide, family and friends make up for a good proportion of purchases.

I think this concept of price-choosing is a really interesting area and definitely worth exploring for digital (read: copyable) products whose markets need rethinking. Things are worth what people pay for them. And this means to some degree, you control the value of what you consume by how much you decide to fork out. When I bought those Motorola phones, my pleasure was increased by what I was convinced they were worth, which means - until the truth was revealed to me - they were worth more to me.

So the question is, if you decide to be tight, are you cheating the musicians, or yourself?

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Blogger erin said...

Great post! I love that I don't have an answer. :p

I think this topic comes at a good time in the history of consumer-honesty (with themselves). It's sort of like Planning for Good on Facebook or All Day Buffet. People want to do the right thing; they'd like to imagine they have good intentions; at the end of the day, they want to be happy and feel good.

Planning has a huge role to play here (I think). If we can properly identify what consumers' needs really are, then we're one step closer to making them feel good and happy about themselves and their purchases.

When I saw the Radiohead news a while back, I thought Cool! But I think I thought cool, only because it's so unique. Go Radiohead! If we give consumers the responsibility to think for themselves before they're ready to, then we might be opening a huge can of worms. People love to place blame and find fault (is it really human nature?) and this kind of free-for-all sounds like it might have loopholes. Who knows. I don't.

Anyway, still don't have an answer. I really liked your thinking process. So keep it up!

10:02 pm  
Blogger Andy said...

Thanks Erin. And thanks for the post on your blog.

For me, this is more of a cultural or even philosophical thought than one I immediately connected with marketing. New rules are being written by changing circumstances (it's easy to nick music) and the Radiohead and Songslide approach is a great experiment.

This initiative shows that music consumption is not just a b/w battle between buying or stealing, but that there are some untapped grey areas in the middle where convenience and conscience can be forced to have a new relationship.

I wonder how 'value' will change over the next 20 years when it comes to this kind of consumable. I've thought for years that it is less and less important to 'own' things at all and we're seeing plenty of signs of this already.

Perhaps the future of consumable pleasure in almost entirely through experiences rather than possessions. Which is maybe why I enjoyed bidding for and winning those Motorola phones more than owning them!

Seth Godin talks about the anticipation of owning things - that the relationship with that thing begins the moment you start thinking about getting it. OK, going to stop writing now.

4:58 pm  

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