10/10 for Commerce, 1/10 for Value

Love the bag “Good Things Inisde” . Body Shop has done a darn good job of 2 things # (i) making the customer “feel goooood” about his purchase (ii) making a prospect feel excited about entering the shop to look at what’s on offer. If these 2 have been done right , its positive impact on Sales of the goods could be quite significant .

But , what if the quality of the product wasn’t great ? What if the quantity wasn’t as much you had expected ? What if the nutritional value wasn’t there? What if the content wasn’t to the mark ? Very fundamental questions and it is important to understand it’s impact on Sales . Quite frankly, business will still prosper , sometimes beyond the founder’s imagination . YES !!!!! Even if the content didn’t live upto the mark. I’ll explain as we go along.

So what makes a customer feel good about his purchase ? Now that, without doubt , is meeting customer’s need !! As simple as that . Now does a customer need durability when he is buying a suit or is he looking at impressing his friends at the party where he will be wearing the suit ? Does a lady need comfort when she is buying those high heeled sandals or does she need to look sexy ? Does a kid seek nutrition when buying cookies or is he seeking to satisfy his sugar cravings ?

If you look at these questions, you will realise that its not the value that gets people to buy as much as it is the need . And if you could fulfil that need, job is done and the Benjamins can keep rolling in for the company.

If you look at Lays for that matter. The ads of this brand are brilliant, peppy and just cool. It could have the Indian Cricket Team, Saif Ali Khan, Ranbir Kapoor or Alia Bhatt — it definitely gets 10/10 for ads from me. And when I do indulge in eating these, it is just delicious and addictive and I can’t stop myself from eating more. I am sure some of you would have felt the same about your favourite sinful foods and no amount of guilt could stop you when your on a roll (and especially if no one is watching) .

But would I score it 10/10 on value? NOPE !!! Would I munch on potato that has been fried in industrial oils, packed with preservatives so that the same can be consumed over 6 months or so by someone who at his weakest moment chooses to drop the ball on eating healthy. Someone always is letting go of his commitment to eating healthy and its these goodies that get attacked first when presented in front of a mortal like you and me.

These are the most profitable 4 letter word in the history of RETAIL . It turns your knees weak, it creates the need which wasn’t there when you entered the mall, it makes your palms itch, it makes you restless — this is a magical word . I will never forget the video of Lulu Sale in UAE where everything was being sold at 90% discount and the Sale was only for a day. People had gone berserk , they were fighting for discounted TVs, they were arguing over dress sizes, they were running to every corner of the Lulu Hypermarket to stack their trolleys with as much as they could , it was a crazy sight .

What was the need it was satisfying — Saving Money . And that was worth the wait outside the shop for hours , that was worth the fights and arguments , that was worth the restlessness of shopping as much and as fast as you could that day . What you bought was of less importance , till the time it served you (the master) in fulfilling the need of saving money.

The marketeers of brands know that . The marketeers of unbranded goods also know that . They know what does the audience need, what does it crave for, what is it willing to pay for through its nose and that’s exactly what they do. Serve you goods that create immense value for the companies but probability is high it may not create value for you as much as it may fulfil the temporary need of being heard, saving money , looking good, quenching your thirst or giving into your sweet tooth, etc.

I was inspired to write this post when I noticed that the small packet of mixed nuts I bought had packaged the product very well. It had cashews, pistachios, almonds and peanuts . The first 3 would have occupied 75% of the pic and the rest was peanuts on the picture. But when the packet was opened, it was 80% peanuts and 20% the rest. 10/10 on commerce, 0/10 for value. It served my need of satisfying my hunger by munching something light and I would have moved on and forgotten about it.

And then, that very day, I saw an episode of Friends where Monica is hating her new boots as it hurts her too much. But why did she buy in the first place , as shown in the clip here, (i) she wanted the attention (ii) she wanted to prove to the sales lady that she could afford it (iii) maybe she’s seen in the movies how sexy they look and wanted to always own a pair of them. When I asked my wife if most women feel this pain when they wear boots or high heeled sandals and she said YES. There it is — 10/10 for Commerce , 0/10 for Value.

You might be wondering why I am writing about chips and boots instead of Finance and Investments like I normally do. The reason is the same — a lot of advice/tips/noise/news/ads/infomercials etc. is looking at fulfilling a need of yours — MAKE QUICK MONEY . And it works, every time, with someone somewhere falling for it.

Every ad that you have been bombarded with , will have in it the seed of appealing to your permanent needs i.e. needs that are universal and do not change a lot. And that is what marketeers know about human psychology and they exactly play (and prey) on this very need.

I am not saying that these platforms are not good , these may be and they serve millions of people on daily basis. But how many walk away making the riches or striking gold on many of these platforms . People get in , get excited, bet big, loose mostly and most of it and walk away with a bitter experience having made a decision never to gamble again or risk again or invest again.

Charlie Munger talks about a very important bias called Incentive Bias in his video on Psychology of Human Misjudgement. This is a MUST SEE video if you want to ensure that your not getting manipulated by people whose incentive is to make the most for themselves out of the money in your bank. Though they may make you believe that they want you to add more to your health, wealth, relationships, longevity, etc. And they do that exactly by satisfying your need of being heard and cared for .

So many Relationship Managers at Companies eg. Banks get trained on soft selling skills more than understanding valuations, markets , trends, business cycles , etc. And if we were smooth with clients , it could replace the need of being informed or educated about the capital markets . Just in case , you are one of them whose been incentivised to profit at others expense (many a times without the other person even knowing) , then I have news for you. You are getting played too, you just ain’t aware of it.

The only option you have , is to get better at sifting for value instead of giving into your cravings. Get better at understanding the game being played , so that you could walk away from the game when the odds are against you.

There will be many platforms that will entice you with opportunities in Bitcoin, Stock Trading, Futures & Options, new career moves, job opportunities abroad , etc . Get better at seeing value first before you bite the bullet now and regret later.

And extraction of value needs work to understand the intricacies of the system, the pitfalls, the advantages, the disadvantages, the options, the competitors product, the strategies, the risks involved, etc. There is immense value available on platforms available to us, but it’ll need work for you to walk away with it.

Your job has opportunities to network and build relationships that could profit you for life. Your supermarket has products that could provide you optimal nutrition to stay lean and energetic. Your mobile has apps that can boost your productivity and creativity. Your family provides you opportunity to creates moments you will cherish for life. The books in your library provides you an opportunity to master a skill that will add 4 stars to your resume . The newspaper has an opportunity to get informed about markets and economies.

Benjamin Franklin once said “I conceive that a great part of the miseries of mankind are brought upon them by the false estimates they have made of the value of things, and by their giving too much for their whistles.”

There is abundance of value around you. Make the most of it. You get valued in life, only if you can add value first . And if you can’t, then get ready to be sucked in by the marketing whistles like the SUMMER SALE or HOW TO BECOME A MILLIONAIRE IN MILLION SECONDS !!!!! Watch Out, they coming for you…

Love

Manish

Notes from Manish Gvalani

Notes from Manish Gvalani

This blog is a collection of personal notes being made during my experiences at work, relationships, fitness, losses, gains, experiments & more.