In this episode, we talk about the meaning of value and the ability to value something.
Remember when I first got into the trading world, I had a mentor that was helping me get in and he was a natural gas trader and what he told me is the most critical skill that a trader needs to have is the ability to value something. So how do you come up with a value for a commodity, etcetera?
So when we're looking at this word valuation, let's take a deeper look into what value actually means. Value is how useful something is. So when you're talking about how valuable something is, we're talking about the utility you are getting from it. So value is derived from the usefulness of something and that is the utility that we are getting. And when we're getting utility, the thing about utility is, utility subjective. Different people get different types of utility from different things.
So I'll give you an example. My neighbor Yasmina and I've mentioned her before, her and I, we both like to hang out on different sides of the beach. She so again I'm living in Tulum and she likes to hang out on the public side of the beach and I like to hang out on the private side of the beach. So on the public side of the beach, the reason she likes it, is because it's lively, there are a lot more down-to-earth people, she can go make a lot of friends and there's just more stuff on that side. The music, the vibe that she values much more. Me on the other hand, I don't like the public side at all. I try to avoid the public side as much as I can. The public side has drum circles and all this noise and I don't know, it just sounds, it just seems crazy to me and I avoid that section.
I always go to the private side, so for the private side, it is a lot more expensive. However, what you get is for me, you get tranquility. I get peace and quiet. I'm able to go to the beach and it's just me, the ocean and the jungle. And I can get lost in my thoughts. I can read a book, I can fall asleep all the while I'm also getting table service with food and drinks. So for me, this is much more valuable than having to deal with all the noise on the public side.
So value because there are different utilities for different people for value, value is subjective. Value is it can be a perception. And when you're thinking about how value is created for service-based businesses, value is created at the intersection of human interaction. And that is from the author of the book Mapping Experiences. It's a book about um customer alignment through journeys by James Kalbach. So I'm obsessed with the customer experience and employee experience at this moment. And James Kalbach says that value is created at the intersection of human interaction for service-based businesses.
And I would even go and argue much further that every single business is a service-based business because even if you have a product, you are still delivering a customer experience and that customer experience is a service and the value that someone gets out of that customer experience will be at the intersection of that human interaction with your brand and your company.
Okay, so we've determined that value is subjective. Different people get different utilities from value. We also learned that value is created at the intersection of human interaction. So what does that actually mean? Like how can we use that for our benefit? So, when we're looking at value, what we want to do is we want to map out all the touchpoints between our organization and the customer and the customer even that it could go further beyond the people that are just buying products from you, your customers are also your employees because you're delivering a service to your employees as well.
So what you want to do is you want to map out all the different human touchpoints with these different stakeholders and then try to figure out how you can maximize service value at these touchpoints and to do this, you have to learn what the customer values. They also have to be seen why something is valuable because value is subjective. Sometimes people don't understand how something is valuable.
So to give you an example um this whole avocado crazy. I didn't understand it at all, it was like avocados, they're mushy, they're gross. I don't see why people like it. And then my cousin Mariam, she was like oh I like it because it's like buttery and it tastes good and it's like filling and she likes that buttery taste and I was like oh interesting. So then the next time I tried avocado, I try to appreciate the buttery nous of that avocado and I was like oh I see why this is so enjoyable. It's not something I value before, but it's something I value. Now someone had to open my eyes to it.
So when we map out all these different touchpoints, it allows us to get a better vision into our business in terms of where there is room for opportunities to increase value based on these human interactions that we are having. So value is created at the intersection of human interaction. Now that you know that, look at all the different touchpoints in your business where you have human interaction and try to figure out how you can increase the value. If you just work on this one little bit, what you're going to find out is a lot of other stuff in your company. For example, your product or other things. It doesn't really matter. What matters is the customer experience and you can increase the value of that customer experience by just doing this touchpoints exercise. Hope that helps. This is Robin Copernicus. Boom. Bam. I'm out.
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