October 20, 2021

People like us want things like this

In my last message you learned about a 1913 Liberty Head nickel that sold for $4.5 million dollars at auction.

At the end of the message, I asked you to reply with why you think someone would even want a manky old nickel from 1913.

Most of the responses fell into one of the following categories:

“Maybe the buyer had the four other ones and had to complete their collection?”
“Very rich people collect antique items as a hobby.”
“The novelty of owning a very rare coin.”
“Because it is rare and an antique.”
“They’re collecting trophies.”
“Bragging rights!”

In my humble opinion, “bragging rights” is closest to the mark, but I think that’s only part of the story.

For a luxury purchase like this, I think it’s safe to say that what the buyer is really buying is a feeling.

But what kind of feeling are they buying?

At this level, it’d be one or both of the following:

Reinforced Identity - How the purchase will make the buyer feel about himself or herself (i.e., “pride of ownership”)
Increased Status - How the buyer believes the purchase will make others feel about him or her (i.e., “bragging rights”)

Note that in both cases, there is an implied peer group of which the buyer is a member. Let’s call that group “world-class coin collectors”.

Now…

If someone wants to be considered a true member of this peer group, at some point they will be compelled to buy something like a 1913 Liberty Head nickel because:

It reinforces their identity as a world-class coin collector (i.e. “This proves that I’m not a poser / impostor / dilettante!”)
It increases their status in the community of world-class coin collectors (e.g., “This purchase will make other coin collectors respect and envy me!”)

Which brings us back to the beginning:

Q: Why would someone want a 1913 Liberty Head nickel?

A: Because they are a coin collector.

…and if they want to prove to themselves and/or others that they are world-class, they need to buy one.

Here’s the thing…

Being in a community can have a powerful influence over what the members desire.

There are two useful - but very different - takeaways from this:

If you know what communities your ideal buyers are in, it will be fairly easy for you to discover what they most want.
Be very thoughtful about which communities you choose to join, because they will have a powerful influence over what you want.

Yours,

—J