Our notion of value is being challenged

Work is a funny thing. We see it as a loss of our time. When we work for someone we typically contract to give them a set number of hours each week in the expectation that within that space of time they will make use of our expertise. In return they pay us a set, agreed upon, amount of money. This has all sorts of implications. For a start it is an unwritten contract (despite what you may think when you sign a contract with an employer). Implicit within it is the fact that you will be invested in a business that supports your lifestyle to the extent that you will truly give it the value that resides inside your head (and heart).

This approach creates a business model that we have commonly accepted across the globe. And it has an impact on the way a business operates at the outward facing interface with its customers. Here too, an unwritten contract takes place. In its simplest format it goes something like this: “We, as a business, have specific costs and needs and profit margin requirements. So our primary commitment to the business is to seek ways to make the most money out of it (and you) without going to prison. The moment you agree to do business with us, you have agreed to our implicit business model and are now bound to pay us what we have asked, regardless.”

I know. The wording makes me uncomfortable too. Which is why business then work so hard to create an aspirational look, become our friends in social media and create the kind of relationship with us where we will not only part with our money but we will also agree to somehow promote their business.

What is Value and How Do We Understand it?

Some time ago I visited the subject as a thought experiment. I was really wondering what would happen if we had a totally different value system for goods and services that worked on a mutual understanding of value of a product or service instead of an agreement on its cost.

It was pre-semantic search days and very early still, in Google+. The cost of value is a complex matter, certainly. But that does not mean that we should not be willing to re-examine it.

When a restaurant with no cash register and no prices manages to make $3 billion a year and successfully run 1,600 outlets it’s an indication that we’re, gradually, getting into a world where we are willing to think differently about what we ‘buy’ and what it really means to us.

Food seems to be an area where most of this experimentation is happening for two reasons: First, we all have to eat. Beyond the aesthetics of taste, style and setting there is an inherent baseline to the value of food that few would reasonably argue with. Second, the pricing of food is complicated. A restaurant that really values what it does and is passionate about its offerings also has to balance everything else it offers (its service, customer handling, food order processing, décor, style, and overall experience) on the razor-sharp knife edge of perceived customer value at the pricepoint. Get that wrong even by a tiny percentage and you end up with more disgruntled (or entitled, depending on circumstances) customers than is healthy for your business.

The SAME Café tackles this by allowing you to pay just what you want, while the JBJ Soul Kitchen creates a safety net for itself by being partly funded by the Jon Bon Jovi Foundation. This allows them to take things one step further. They say that if you have absolutely no money and cannot pay you could donate your time instead, turning the value of good food into something that we can all understand. At the heart of all this lies the revolutionary concept that value is now predicated around something we experience and assess in terms of its impact on us as opposed to something we have to pay for which becomes valuable because of the buying power it deprives our wallets from.

The Disruption of Delivering Value

In case you think that restaurants have it easy (after all, you do have to enter their premises and you are in their domain when you eat their food) when it comes to creating an environment in which they can disrupt the traditional notion of the value chain, consider that the industry standard, still, tends to go the other way.

One project I have been involved in from its inception (disclaimer: I still am an advisor) has been NeilaRey.com. Created with an approach in mind that places the end user squarely in the center of it, and run exclusively by Neila Rey (who does everything including coding the site, graphics and replying to emails) it is funded entirely through donations that help pay for the hefty hosting costs a 60,000 visitors a day website, incurs.

Like the restaurants mentioned earlier the website focuses on what it does best. There is no unwritten contract of perceived value between it and its visitors because everything on it is free and Neila Rey vows “it will always be”. As a result it grows by word of mouth publicity that is driven by the positive impact it has on the lives of those who come to access its content. Its reach and impact on the lives of those who visit it (Neila Rey bodyweight fitness routines are now practised in schools, sports teams and yes, even some correctional facilities, across the globe).

The Underlying Business Model

Just because there is no pricepoint to a business does not mean there is no business model to work with. Quite the opposite. The moment a formal request for money goes out of the picture what arises is a focus on value creation that is not that far removed from the sense of value that arises out of work in the small community settings of the pre-industrial age.

Panera Cares Cafés have a strong ideology that governs everything they do and a business-like approach that controls operating costs (a requirement for the survival of a free business model) through the knowledgeable application of location and demographics. It would be easy, for instance, to go for the knee-jerk reaction and find an out-of-the-way location because it’s cheap. That, however, would affect the entire business model that seeks to attract middle-class, home owners as a core audience, serve as diverse a customer demographic as possible and helping “food insecure Americans” experience “…a warm and welcoming place…”.

JBJ Soul Kitchen, links everything it does to value, but not money. Driving the point home by frequently involving volunteers or customers who cannot pay in its food serving services, helping drive awareness of the impact of value.

The SAME Café keeps costs low by not spending on the matching cutlery and décor experience but there is one area where no compromise are made and that is the quality of the food which “…has a menu that changes daily but always features food that's made from scratch and is largely organic.” The Same Café owners set out to fix what they “…felt there was "a disconnect" between the people serving the food and the people eating it.”

NeilaRey.com may have no staff but the quality of design does not drop. Content gets produced regularly and new routines are created and tested. every month and new bodyweight training routines are released on the site, every week. Its mission statement is to make fitness accessible and to make it fun, a two-pronged aim that flies in the face of every fitness business model that asks you for a commitment of money in order to make sure you commit to achieving the end result. (Update: in the time since this article was written NeilaRey.com has been transformed into Darebee.com a now global fitness movement with millions of adherents all over the world. It is still a totally free model staffed by volunteers.) 

The Bottom Line

All of these are experiments. They all work. They all show that is possible to rethink our approach to how we use money to exact a commitment from a ‘customer’. Each of the above free business models shows that it is possible to rethink models of interaction that have worked because there was no alternative and have been in place because we have been unwilling to think of alternatives.

None of these has come about in an easy way. The SAME Café owners were told flat out by loan officers and banks that they were crazy. The JBJ Soul Kitchen and Panera Cares Cafés are regarded as outliers. NeilaRey.com is a lone voice in a global industry that is rigidly bound in the traditional model of “pay to gain”.

That they exist is testament to a new century of awareness and experimentation, dawning, by degrees. They are bright examples of what a true relationship economy is all about. In their existence, each presents a fresh hope of connecting at a human level that understands the mechanics and the value of the connection. Money, when it enters the picture, is the reward that’s been won, not the primary reason of the entire relationship and that is something that even paying business can benefit from, by understanding it better.


UPDATE 21.11.14: The idea is spreading to other industries including investment firms as Aspiration shows all too clearly. 


External Links

Ten restaurants that let diners pay as much as they wish