The Sales Equation. How iPhone, Netflix and Tesla sell. How to supercharge your startup sales.
Hey everybody welcome back to the Product Market Fit Newsletter π
My name is Guillermo Flor and I write this weekly newsletter to help founders, growth professionals and product people to grow & fund their companies.
Fiuuu its been a couple of intense weeks!!
Doing a short recap:
Last week we launched the first Product Market Fit Community Meeting π₯
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We closed a collaboration with Notion π₯If it works weβll work more together.
Thanks to the collaboration you get 6 months of new Plus plans, including unlimited Notion AI so you can try it all for free!Β To redeem the Notion for Startups offer:
1. Submit an application using our custom link: https://ntn.so/guillermoflorο»Ώ and select Guillermo Flor on the partner list.
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Today I want to share a little bit about how to drive sales for your company and the relationship between price and value.
But, before going in, a new session Fred Again just dropped π₯
First thing: what is price and what is value?
Price is what you pay and value is what you get.
Now, everybody understands what price is. Itβs basically what you pay to get a product or service.
But what about value?
Value is a more abstract concept, hard to determine many times and its not the same for every customer.
For example, the value a company gets from buying facebook ads is the number of leads it gets + the number of impressions it gets, which can convert into clients down the road.
In this example, it can be easy to give a number to the value.
However, whatβs the value of wearing a Rolex? The value is harder to determine there and yet nobody can deny thereβs value.
In simple words: Value is basically what the customer gets when using your product or service.
Now, if you go deeper into the concept of value you can find that value is all about the dream outcome + the likelihood of achievement / by how long it will take to achieve and how much effort the customer hast to put in to achieve it.
For example:
Nike sells running shoes
The dream outcome it sells is that you can become a pro runner (or at least a super fit one)
The perceived likelihood of achievement is fairly high: if you train with their shoes you can do it
the time delay can be fairly low: you can get fit in a matter of months
the effort and sacrifice is high but they market that as value (the more effort the better)
So the value of Nikeβs running shoes can be huge. Whatβs super interesting is that, in order to create more value they make you dream big by using the best athletes in the world as brand partners.
Now, there are other components of value that arenβt in the previous equation that you have to also take into consideration:
Quality (Q): The standard of the product/service.
Features (F): The attributes and capabilities.
Performance (P): How well the product/service meets needs.
Customer Service (CS): Support and after-sales service.
Durability (D): Longevity and reliability.
What does Value have to do with price?
The higher the Value the higher the price, thatβs obvious. But that also means that the higher the margin and the more healthy your business.
The more value a customer perceives relative to the price the more likely itβll be to buy
So, what does this mean? Itβs fairly simple, a company will sell more if it offers a great value product or service at a retively low price point.
Now, letβs see how this works in real lifeβ¦
Premium: How iPhone, Netflix and Tesla sell and how to apply it to your company following Notionβs pricingπ
How iPhone, Netflix and Tesla sell π
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