Making the case for intangible value
Why changing perceptions can matter more than changing reality
“There are two ways of being happy: We may either diminish our wants or augment our means — either will do — the result in the same; and it is for each man to decide for himself, and do that which happens to be the easiest.” — Benjamin Franklin
Value comes in different packages
When thinking about value, we might imagine a couple of different types. There’s ‘real’, tangible value — the kind that can be quantified, is easily measured and makes the most sense to the most people. Something is worth the sum of its parts, plus the human cost of its production. But then there’s another kind: ‘intangible’ value, that which is built on subjective perception.
Fundamentally — cognitively — there isn’t any real difference. All value is relative, not inherent to any individual thing, but rather is perceived and subjectively constructed in our minds. If we don’t perceive objective reality in the first place, what is the point in optimising it? This is Rory Sutherland’s argument — and I think there’s something to it.
As a result, is there anything wrong with improving our enjoyment by altering our perceptions of something, rather than directly investing in its material changes? If improving happiness by creating intangible value has the same effect as changing things in the real world, then that kind of value is just as real as so-called objective value. Is it, then, logical to say that creating intangible value through marketing (and branding) is better than creating objective value through consumption of labour and natural resources?
It’s an interesting thought to consider. How many of the knotty issues of life could be solved by tinkering with perception, rather than attempting to fix them through the tedious, taxing business of trying to change reality? This is a nice segue into thinking about marketing’s ability to reframe conventional problems to come up with more unconventional, creative and effectual solutions. Marketing is all about creating and managing this intangible value, manifested in those 7 Ps we all know so well. Marketers therefore need to be aware of the idiosyncrasies of intangible value and be prepared to think laterally about unlikely solutions to complex problems
Perception is plastic
We can’t tell the difference between the experience of consumption and the environment in which it’s done. Marketing is able to change the value of something by changing our perception of it, rather than the product itself. If this isn’t an astonishing accomplishment then I don’t know what is. How many situations would greatly benefit from this seemingly magical ability to improve situations without actually altering the reality of things? In a way, this change in ‘perceived value’ can be almost as satisfying as a change in the ‘real value’ of something.
Fundamentally, things are not just what they are — they are what we think they are.
So, value does not only lie in the primary product itself, but rather the context in which it is consumed. Take the example of a Michelin-starred restaurant, but one which is located next to a rubbish dump. In this case, the value of the restaurant experience cannot be improved by tweaking the food, but rather altering the context. It is as if we cannot separate the quality of food from the environment in which it is enjoyed.
Experience ≠ reality
Ultimately, the same product can mean different things to different people. As a result, marketers have an incredible opportunity to influence how people feel about a product or the experience of its consumption. Perceived value, therefore, is the result of certain psychological assumptions by the consumer about the quality, convenience, and other factors associated with the experience of selecting a product or service.
Note that perceived value is not wholly contingent on the actual, intrinsic (or ‘objective’) value of a product. As a result, a shift in these ‘irrational’ aspects can cause a shift in the overall perceived value. Examples of this include research which shows that branded painkillers are more effective at alleviating pain than unbranded ones, people think washing their car makes it drive better, and we have an irrational affinity towards free things (even if it means waiting for hours in line for them). Essentially, tweaking the smaller, irrational things can have positive and desirable changes in behaviour.
To take it back to Frankin’s quote at the top of this page, there is an interpretation of this to take home. Reaching a particular objective, such as increased sales of a company’s product, can be achieved through a seemingly irrational approach. If there’s anything to be learned here it’s that oftentimes tinkering with intangible value can yield far better and more significant results than simply addressing an issue through the most rational and seemingly logical means. Sometimes, we don’t need to solve big technical challenges with big, expensive technical solutions. It might just be a matter of looking at things from a different, more lateral point of view.
