Context Shapes Perception of Value

The context in which a product or idea is presented plays a critical role in how its value is perceived. The same product can be seen as either priceless or worthless, depending entirely on the surrounding context.

This is because we rely on contextual clues to make sense of the world around us. When we encounter something new, we look for familiar reference points to help us categorize and understand it. Without these clues, we are left to guess, and we may guess wrong.

A striking example of this is the story of the world-renowned violinist, Joshua Bell, who played his priceless Stradivarius violin in a subway station. In that context, he was largely ignored and made only a few dollars. In a concert hall, people pay hundreds of dollars to hear him play the same music on the same instrument. The product (the music) was the same, but the context was different, and that made all the difference in its perceived value.

This demonstrates that even a world-class product can fail if it is poorly positioned. The messaging, branding, pricing, and channels used to sell a product all contribute to its context and, therefore, its perceived value.

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