Consider a man stranded on a deserted island (Island 1). It’s very small. There is no food, fresh water, little shelter or shade. The stranded man has a clear desire and is highly motivated to get off the deserted island.
Now imagine that there is a second island only 10 miles away. Within sight, yet out of reach.
On this second island there’s lots of food, fresh drinking water, comfortable shelter, shade, and family and friends who are anxiously waiting to welcome the stranded man back.
Now let’s pretend that an entrepreneur comes to Island 1 and offers the man a boat to transport him to Island 2.
Now think about this… does the stranded man care if the boat is made of wood, fiberglass or inflated air? Does the stranded man care if there is a fast motor, comfortable seats or a shaded canopy on the boat?
Not at all.
The only thing the stranded man cares about is will the boat successfully transport him from Island 1 to Island 2 (the transformation). Plus the stranded man will be happy to pay the entrepreneur any price to achieve the transformation.
This little parable elegantly illustrates that value creation is about transformation.
The stranded man doesn’t even care if it’s a boat that delivers the transformation. The mechanism that delivers the transformation could be anything– a rocket ship, a Star Trek transporter, or holding on to the dorsal fin of a dolphin. The stranded man doesn’t care.
The mechanism to achieve the transformation doesn’t matter to the stranded man. He is seeking the most effective means to get from one state (stranded on Island 1) to a higher state (getting safely to Island 2).
The moral of the story is simple.
When you are creating value (the mechanism) for your customer, focus on creating a transformation. You are creating the best and only way to help your customer get to their desired higher state.
The job of the entrepreneur is to facilitate a desired transformation at a price that the market is willing to pay to use the mechanism (product or service) to achieve the desired outcome.
The more motivated the customer is to achieve the desired transformation, the more valuable the mechanism is to the customer for achieving the transformation regardless of its form or method.
Strategic positioning of your value should always be based on the value of the transformation desired by the customer, not the features, attributes and functions of your products or services.
The customer doesn’t care a lick as long as the customer believes your product or service offers the best and only choice to facilitate the desired transformation.
This is the key to premium pricing and competitive advantage.
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