Price premiums are the prize of innovation. But like any innovation, the creator has only a short window of opportunity to capitalize on before the copycats come.
So, should the goal of innovation be to squeeze every last penny out of the market while the irons hot? Or, should the goal be to leverage the exposure to harness long-term relationships?
In my opinion, I would rather make a mild profit, reach a larger audience and use my exposure to deliver a service of kindness that has my clients trust me to the point that they can’t image doing business with anyone else.
Innovation comes and goes but loyalty lasts a lifetime.
Just look at Coke. In 2005 Interbrand assessed Coca-Cola at 36% brick-and-mortar value and a whopping 64% of intangible value, totaling 67 billion. The intangible value is mainly placed on “loyal relationships.”
It’s no different from a cheese steak shop who decides they will serve quality meat and larger servings because they know they will make up the margins through happy customers (assuming the service is good) who tell others and become loyal.