It used to be called barter. Today, it’s a transaction. I can give you an apple and receive a pear in return. Or I give you a $1 for a glass of lemonade in return. But the only reason this system works is because there is a perceived value attached to both ends of the exchange, and the values are matched. You have a pear but want an apple; the apple is more valuable to you than a pear. I want the pear but have an apple; the pear is more valuable to me.
Why can’t I just ask you to give me your pear without giving you something in return? Well that’s because you’d be thinking, what is in it for me?
Value exchange, or a transaction, is based on economic principle: All decisions and behaviors are based on perceived gain and value. It’s pretty straightforward and visible in commerce. A customer will only pay if he or she is given a desired product in return. A business only sells a product for money in return. A customer and a business only engage in the transaction because they each see something in it for them; you and me only exchange our apples and pear because it benefits the both of us to do so. If there’s nothing in it for me, I’m not doing it.
But real life isn’t a static economic model; a transaction is more than just exchanging money for tangible goods and services.
It is multidimensional—there are actually three exchanges of value taking place. In each instance, the values being exchanged must be matched value for value.
When a customer enters a store, he has chosen to spend time in exchange for a certain experience in the store.
This is the most obvious exchange that occurs: the customer purchases an item by handing over money in exchange for the item.
Information has value to the customer, just like money does. It is important to understand that customer information is not part of the monetary exchange that occurs at the cash register. Because information has a value attached to it, it must be exchanged on value terms.
When asked for your email address at the cash register while shopping, what are your first thoughts? Most likely, you’ll be thinking why do they want my email address? What are they going to do with it? What will I get in return for providing it?
You are essentially asking of the business how it will be using the information to fulfill its end of the value exchange. Simply having a link on a website saying sign up for emails, does not really work because there is no value offered to the customer. It is imperative that a business shows that there is value in behaving in this way for the customer. Instead have a link to sign up for emails with a reward of getting something special that others—who don’t sign up—don’t get.
The value that the customer will receive in engaging in this transaction must be clearly portrayed in each instance of value exchange.
The consequence of failing to offer value for value, whatever the exchange, is a face palm. Actually it’s worse than a face palm, it can materialize in terms of bad customer experiences, tuned out customers, and a worst-case scenario of a lost customer.