What is value and how do you create it?

Imagine this scenario. You’re preparing for a big race. You’re at the track the day before, prepping your vehicle, when you notice the fuel level is very low and you don’t have any on hand. You have two options for purchasing fuel.

Option 1) There’s a gas station two blocks away that sells the race fuel you need. You can take your truck there, buy a 5 gallon can, and return to the race track in just over 15 minutes.

OR

Option 2) There’s a vendor at the track that sells the race fuel you need, but it’s $4/gal more expensive than it is at the gas station. You can buy a 5 gallon can and fill up in 5 minutes or less.

What is your choice? Based on what I told you, you would probably go to the gas station and save yourself $20, right? It's the same product for a cheaper price and it only takes 10 more minutes of your time.

How is your decision impacted if I change the situation, though? What if, instead of having a day before you needed fuel, you only had 20 minutes? You’re probably going to run over to the vendor and fork out the extra $20 for the race fuel you need.

What happened to the fuel being sold by the vendor at the track, in this scenario? The fuel didn’t change, nor did its cost, yet it was suddenly worth more to you. This is an example of how value can be created.

Creating value

The fuel vendor at the racetrack in this scenario recognizes the value in not only his product, but in the convenience he’s offering by being on-site. The value he’s selling isn’t the fuel, it’s the accessibility of fuel to racers at the track when they need it. He is able to charge more because it is valuable to have fuel in the right place at the right time.

How does this apply to your race program? Simple. You need to create and recognize the value you have, then sell it to your customers, who are your fans and sponsors. Here are a few ways you can provide value, although this short list is by no means exhaustive:

Now, think back to the fuel example. The factors that affected value as you made your decision were time and money, and it’s no different for your customers. Hardly anyone will spend time or money on something that doesn’t feel valuable to them. A fan won’t spend the time to watch your video on social media if they don’t feel like they’re getting something from it, and a sponsor won’t pay you $10,000 to put a sticker on your car when they feel like they could get the same result by spending $4000 on a billboard, instead. This is where you need to build value into the products, services, and even the social media posts you push to your customers.

You’ll notice that I used the word “feel” quite a bit as I talked about creating value. Value centers a lot around how people feel about the time and money they’re spending. Let’s say that you’re attempting to sell raffle tickets to your fans and the prize is your old helmet. You’re advertising the raffle on your social media and with a sign outside your pit space. Your advertising reads “Win this helmet! Raffle tickets $10/ea.” How can you increase the value of your raffle tickets without changing the price or the prize? The answer is to change how fans feel about buying a raffle ticket. What do you think would happen if you changed your advertisement to read “Win the helmet I wore when I won the championship! Raffle tickets are $10/ea. and only 50 of them will be sold.” You increase the value by increasing the feelings of nostalgia and of FOMO.

Creating value for your customers is not only about offering them something they want or need, but also about making them feel good about spending their time and money on it. Value is subjective and emotional, and you can influence it without lowering your price. By understanding what your customers value and how they perceive value, you can increase the chances of converting them into loyal fans and sponsors who will support your racing career.