Captain’s log, stardate 20200101
One of the presents my 9yo son got for Christmas this year was a $100 gift card to Steam.
If you are not familiar with video gaming, Steam is an online video game marketplace created by video game developer Valve. You install Steam on your computer, create an account, and then you can buy and play video games on your computer.
Anyway, Cooper got a $100 Steam gift card which we put into his account the day after Christmas. Not five minutes after doing so, I received an email receipt saying that he spent $90 on a single purchase.
“Wow, that was fast!” I thought, “I wonder what he bought…”
I opened the message to discover that he blew almost the entire gift card on a knife skin.
Again… If you’re not familiar with video gaming, a skin is decoration for a player’s in-game avatar or equipment. In this particular case, Cooper spent $90 to make his character’s knife look a little different in his favorite game.
To be crystal clear, a skin doesn’t do anything. It doesn’t make the knife more effective in any way. It doesn’t make it last longer or cut better or more accurate.
It just. looks. cool.
In a video game.
My initial reaction was not much different than if he had set $90 on fire right in front of me, while maintaining unbroken eye contact.
Fortunately, I got the email while I was out of the house and could not (over) react to it immediately.
By the time I got home, I had had some time to think. I asked him about the skin. He was very excited. He showed it to me. And I had to admit, it really did look extremely cool.
I asked, “Do you like it?”
“I LOVE IT!” was his reply.
“Great,” I said.
End of story.
This knife skin thing got me thinking about the subjectivity of value.
Why did I initially jump to judge my son for spending $90 on digital cosmetics? I mean, literally on the same day, my 6yo daughter spent about the same amount on a stuffed dog dressed like a policeman with her Build-A-Bear gift card, and neither me or my wife batted an eyelash.
Does the fact that the stuffed dog is a physical object make it more valuable? Of course not. Value is a perception in the mind of the buyer. It doesn’t matter if the purchased item is physical or digital. In fact, you could argue that digital is more valuable… the knife skin will probably last longer because it’ll never wear out or get lost. And the knife skin won’t be cluttering up our house or get left on the stairs in the dark ;-)
In the big picture, neither item has any utility at all beyond the fact that it satisfies a desire in the buyer’s mind.
And to be honest, it’s pretty hard to throw stones at that.
I mean, what was the last thing that you bought? Was it something you NEEDED? Or was it something you WANTED? Even if it was something you needed, did you buy the CHEAPEST available option? Or did you splurge a little?
Here’s the thing…
Value is 100% subjective. If someone spends money on something and they are happy with the purchase, then it did definitively deliver positive ROI to them. Your opinion on the matter is irrelevant.
This is something to remember the next time you’re in a sales interview. Find out what the client really wants from the engagement, and set your price based on that. If you do a good job, they will be delighted, even if the price was 10x higher than you would have expected them to pay.