Features have value, or at least they are supposed to. On Feb 23, 2023, Ford filed a patent that can remotely make your car non-functional. What??? Why would I want that? Why would I ever buy a car where someone hundreds of miles away can disable it? What if my ex-wife (if I had one) got access to it? That’s insane.
Or is it?
The feature isn’t designed for the car buyer. Rather, it’s designed for a financier to more easily repossess a car when the owner is behind on their payments. That makes more sense. For our first lesson, look at all of the personas in the supply chain and transaction. Maybe you can gain an advantage by helping one.
Now, let’s make this about pricing. Who is going to pay for it? How much? I typically pay cash for my cars, so I don’t want ANYBODY to have the ability to disable my car. I wouldn’t buy a car that had this. It truly has negative value to me.
The real benefit of this feature goes to the financial lender. How could the lender pay for it? They probably wouldn’t pay outright for it. However, they may be willing to offer a lower interest rate to buyers who are willing to have this feature. This works well for the lender in two ways.
- People who are less likely to default would choose this option.
- If someone did default, it would be easier to repossess the vehicle.
But still, who is going to pay for it? The buyer of the car. A cash buyer wouldn’t. But a buyer who is planning to take out a loan may be willing to buy this feature in exchange for a lower interest rate. They pay a little more upfront for a lower monthly payment. This is possibly a great deal.
For the second lesson, when we release new products or features, we need to know who will pay for them and why? What value do they get? Everybody gets to make their own decisions in their own self-interest. We need to think through the value for each participant in the transaction. As a pricing/business person, we need to understand these decisions. Who is going to pay? How much?
What do you think of Ford’s new feature?
Now, go make an impact!
Tags: pricing, value