Value Communication in Marketing
By Joe Kim, Founder of Frontside Consulting
I’ve been in digital marketing for over a decade now and it’s actually an oddity that I find myself with an established career in the space. I grew up thinking I’d be an engineer or something more involved with tangible things and values. I stumbled upon the career and have changed a lot of my opinions on marketing, sales, and value.
Recently with inflation being a big part of the social zeitgeist, the idea of money, purchasing power, and value has been swimming around in my head quite a bit and I’ve come to some interesting conclusions about how that intersects with marketing and economics. Here’s an exploration of those ideas.
Bear with me while I don my velvet robe light up the tobacco pipe and think about some bigger ideas.
Labor Theory of Value
I grew up in an immigrant household that valued hard work. Put in the work, and get the reward. In human history, I think this is true 8 times out of 10 and there’s no debate that putting in work is necessary to create value.
The Labor Theory of Value is the idea that something is valuable because a lot of work went into it and to a degree, this has to be true. Creating value is hard and someone’s got to do the work to solve problems and create things, but the idea is incomplete.
We know this is true because it takes a ton of work to dig a hole, but if no one asks you to dig a hole, or if it’s got no purpose, it’s probably not valuable.
Here at Frontside Consulting, we certainly know this is true as we’ve put a lot of work into ads for our clients and don’t always knock it out of the park and at times have a hard time generating return (value) for some products and services.
Subjectivity of Value
So if work itself doesn’t make something valuable, what does? According to Austrian Economics, we are the ones that make things valuable:
“Value is not in things, it is within us” - Mises
So the Subjective Theory of Value tells us that everyone values everything differently. Here’s a cute example I saw recently:
To most of us, this is pretty irrational. Clearly, $10,000 can buy a lot of Oreo cookies, but for this boy, the cookies at the moment were more valuable to him than a stack of greenbacks. To him, this is perfectly rational behavior. We’ve all paid for that overpriced hot dog or bottle of water at the stadium or event too, but we wouldn’t make those trades if it didn’t benefit us.
Communication of Value
This is where marketing comes into play. In the example of the boy preferring cookies to cash, it’s simply a matter of communication.
“Hey kid, if you take the cash and go to the store, you can get a TON more cookies”
The information can potentially change his internal value structure and provide more value to him in the long run.
Or how about adding a service?
“Pay me $1,000 and I’ll take you to the store with the remaining $9,000 and we can get a bunch of cookies.”
Everyone wins.
Mutually Beneficial Exchange
The subjectivity of value makes it possible to exchange things and have everyone win. I think the greatest example of this is that if you buy a product or service, both people leave saying “thank you.” At least in most polite situations.
When I exchange $10 for a burger and fries it’s because I value the food more than $10. The person selling me the burger and fries values $10 more than the food. It’s a win/win.
Marketing & the Frontside Consulting Approach
So here’s where marketing comes in—we communicate as best we can the value that we are offering on behalf of our clients and use the data we get back to best understand what value our clients get from us.
We have some idea of what works based on our subjective perspectives on what’s valuable, but often we find interesting and unexpected combinations of value and customer. That’s where our Battleship Method comes into play. We test messaging with copy and creative across multiple channels to try to find our customers when we’re most likely to provide value.
So let’s go out there and find those $10,000 cookies.
I hope this was insightful or at least interesting. Worst case scenario you saw a funny picture of a cat.
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