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Thursday, September 17, 2009

Better than Free

As I mentioned in a blog posting earlier today, there was an earlier article on The Technium blog by Kevin Kelly worth reading. The article begins with a discussion of "free" and uses a copy machine metaphor for the Internet. So what is the answer when anything can be copied and appears to be free? Kevin suggests the answer is this:
When copies are super abundant, they become worthless. When copies are super abundant, stuff which can't be copied becomes scarce and valuable. When copies are free, you need to sell things which can not be copied.

I know, probably sounds too simple, but he goes on to describe qualities, or what he terms "generatives," that cannot be copied, for example: trust. Trust is earned and cannot be easily copied. Savvy retailers design their websites and services to cultivate trust from their customers. Kevin suggests that we put ourselves in the shoes of the customer and ask the following questions:
Why would we ever pay for anything that we could get for free? When anyone buys a version of something they could get for free, what are they purchasing?
If we can answer these questions, then we are a step closer to defining ways to create non-imitable value propositions. From his research, Kevin has identified eight categories of these generatives -- values that are uncopyable, or essentially unique. It is the unique, uncopyable, values that can be sold, for they add value to the "free" item and represent something for which a customer would pay.

I think the best thing to do is read Kevin's article at this point. However, for those lacking the time, here are the eight value categories he identified: immediacy, personalization, interpretation, authenticity, accessibility, embodiment, patronage, and findability. The article provides description and examples of each. He goes on to note that:
These eight qualities require a new skill set. [...] these new eight generatives demand an understanding of how abundance breeds a sharing mindset, how generosity is a business model, how vital it has become to cultivate and nurture qualities that can't be replicated with a click of the mouse.

The article has over 200 responses to it, some of which are also interesting and thought provoking. It is a good piece to read and perhaps stores could think more about how these principles might apply to their own products -- and then how we let our customers know that these are the values being provided beyond other sources for the same products.

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