Conveying Value to Your Clients
Internet TV website Hulu announced Tuesday that it will begin charging $10 per month for services delivered to mobile devices including cell phones and iPads. It’s hard in an era of virtually free content to remember that many of the companies generating it need a viable, long-term revenue source to continue to do so.
The crux of the issue lies in each industry’s ability to effectively convey the value of their product or service that justifies the cost associated with them. Media companies produce unique products, but we’re constantly lulled by DVR recordings, YouTube clips, and competition by lots of other media against the value of on-demand, paid content.
To use another industry example, complaints about airline fees have reached all time highs, yet fliers continue to expect low fares. During the era of airline regulation, flying was much more of a luxury because airfares in current dollars cost double or triple what they do today. Yes, they had legroom, meals with silverware, and pillows, but that’s because these costs were included in the ticket price so passengers were paying for them. As long as being on time, fed, comfortable or other features take a back seat to price, the trend will continue.
So how do you create and reinforce value in any industry? There is no magic pixie dust you can sprinkle to solve this one, but here are a few things to keep in mind: Really know your audience – The Wall Street Journal has had a successful paid content model for years because they know exactly what is important to their market and the rate they can charge for it. Know your USP –Understanding your Unique Selling Points and keeping them in front of your market, consistently reinforces your value.
In Hulu’s case, it’s instant mobile access. Look at total product/service value– Southwest Airlines’ “Bags Fly Free” campaign has been tremendously popular. Want to bet they’re getting more people to buy airline tickets worth hundreds of dollars than their competitors that are charging luggage fees? Hopefully, we’ve reached a time where the market meets value models with credit cards rather than rants, and Hulu will be a great bellwether story to watch.