# The Value of a Good Product or Service By:: [[Brian Heath]] 2024-05-31 A rational position within business economics is for a company to offer a service at a price that is precisely what the customer is willing to pay for it. In other words, if a customer is willing to pay $20 for the t-shirt, the business should sell the t-shirt for $20. If the business attempts to sell it for more than $20, the customer won't purchase it. If the business attempts to sell it for less than $20, the customer will buy it, but it would lose potential revenue. However, we know that individuals and organizations rarely behave rationally, and the customer's willingness to pay is highly variable due to internal and external conditions such as marketing, peer pressure, and whether they need a shirt. So, this rational business economics model helps understand pricing and revenue dynamics, but it is hard to execute in practice. When businesses attempt to perform it in practice, they often focus on all the wrong things. Some will attempt price testing to see what customers are willing to pay, but, as highlighted, many more factors confound the results of these tests. They might work in the short run but baffle many organizations as dynamics change. So they'll do more tests and repeat infinitely - always lagging. Other businesses will move beyond price testing and attempt to manipulate customer perceptions in favor of purchasing. This includes leveraging techniques that short-circuit our natural psychological biases, such as time pressure sales, small fine print, and gamification. These things have become so commonplace that we've come to expect them and don't even recognize that they are happening. Between price testing and customer manipulation, the amount of money and energy organizations put into this flawed business economics model is astronomical. We are talking about trillions of dollars and millions of human lifetimes. But, here is a simple alternative that is not a secret and often discussed but ultimately ignored: delight the customer with a good product or service. If one does this, one will find plenty of money to survive and thrive. The problem for most organizations is that their product or service isn't good, let alone delightful. Stop trying to sell a lousy product or service via manipulation and pricing games. Instead, make something good and be delighted by the outcomes. #### Related Items [[Economics]] [[Value]] [[Marketing]] [[Cognitive Biases]] [[Business]] [[Games]] [[Customers]]