On January 12th, 2007, a young man wearing jeans, a t-shirt and a baseball cap entered a metro station in Washington, removed a violin from its case, and began to play.
Over the next 45 minutes, over 1000 people walked by the violinist, but only a handful dropped money into his open violin case, and even fewer stopped for any amount of time to listen to the performance. In total, the violinist received $52.17 in tips.
And $20 of that was donated by Stacy Furukawa, who was the only person to recognize the violinist as Joshua Bell, former child prodigy and world-famous musician who usually plays to packed-out concert halls for upwards of $1000 a minute!
The stunt was orchestrated by the Washington Post to answer the question, “If a great musician plays great music but no one hears… was he really any good?”
But what interests me most about this story is what it teaches us about the importance of context.
You see, most of the people that walked by that morning dropped in a quarter – or nothing at all. And yet, under different circumstances, most would happily have paid $100 or more to listen to Joshua Bell perform in concert.
It was probably unrealistic to expect people hurrying to get to work on time to stop and take notice. If they’d had time to stop and listen they probably would have quickly recognised the quality of the performance.
Context, then, can make a world of difference, not just to people’s appreciation of something, but also to what they’re willing to pay for it.
Let’s carry this idea over into the world of product creation. Most people today won’t spend more than $20 on a book. In fact, with the rise of the Kindle and iTunes, consumers expect to be able to get their hands on a digital book for less than $10.
But what if the book is teaching you how to improve your search engine optimisation?
What if the book is accompanied by some screen-capture DVDs demonstrating how to perform the techniques described in the book?
And what if the person purchasing this book and DVD package has expectations of being able to dominate their niche, greatly increase the volume of traffic to their site, and triple their profits over the following six months?
Now you have a product for which people will readily be willing to pay $500 or more.
The high cost is justified in the mind of the purchaser because implementation should result in a profit from the investment, many times over.
As a business owner it’s critical to understand, first and foremost, your customers’ perspective, and the context in which they view your product. What are they comparing it to? What problem are they hoping it will solve?
The power is in your hands, depending on how you present your offer, to change the context in which your product is viewed.
And once you understand that this is something within your control, you can adjust the context to improve your conversion rate, justify an increase in price, or even create a whole new persona for your business.
Apple is the master at this. Remember the adverts that pitted Mac vs. PCs? It wasn’t just about trying to prove that a Mac is better than a PC; it was subtly saying that the people who own a Mac are smarter and more cultured than people who own a PC.
If you’re a Mac owner then it’s you against the world. PC owners won’t understand you, but that’s ok because Apple understands you and they’re going to back you up by creating lots of shiny new toys that only Apple disciples really appreciate.
Ok, a little bit of hyperbole, but you get the point.
Apple has positioned itself exactly where it wants to be because its products are desirable in the context of wanting to be at the smart edge of technology, and ahead of everyone else.
But context can cut both ways.
If, for example, you promote your restaurant business via a special offer on Groupon, the context you’re presenting your business is not that you have great food, or a great location, or great reviews from food critics; the context is purely one of price.
I would love to see the return rates that some of these businesses experience after their offer expires. The customers they’ve received were attracted by the price, and not much else. The next time they eat out, they’re not going to go back to your restaurant, they’re going to go back to Groupon and see which restaurant has the latest offer.
I’m not saying that advertising via Groupon is a bad idea; as long as your offer still allows you to turn a profit, then you’ll be fine. But if you create a Groupon offer purely as a loss-leader then you could be setting yourself up for a fall.
Actually, making your key differentiator solely about having the cheapest prices has always been a bad idea. It usually ends with a race to the bottom.
But that’s another story.
I recommend reading the full article about Joshua Bell’s Metro performance. As you go through the article, keep thinking about the context and how people’s actions and attitudes changed depending on the information available to them.
When you’ve finished that, take a fresh look at your own products and think about the context in which they’re presented. What are they compared to? How is the price justified? In what way are you promising to improve the lives of the people who purchase from you?
And if the context isn’t right… change it to what you want it to be.