Create Jobs by Adding Value to Your Community Assets – Part II
One of the most effective economic development strategies you can employ in your community or region is to add value the assets you already have. For example, in Part I of this series, I described the multitude of small businesses that have grown up around the national parks in Utah, each providing a service or experience that extends the stay of visitors and increases jobs and local sales tax revenue for the communities. These businesses helped move the communities from just having things to see to things to do.
Things to See vs. Things to do
The Heart of the Ouachitas region of Montgomery, Polk, and Scott Counties in southwest Arkansas (http://visitouachitas.com/) has terrific natural and built assets, as well as visionary leadership. People will come to see things once, but will return many times if you have things for them to do. Here are some examples of adding value to natural assets to create things to do – experiences:
The Price Value Curve - a Powerful Economic Development Tool
In this article I will provide a powerful conceptual tool for adding value and how it can increase income into a business, community, or region, sometimes exponentially. The Price Value Curve demonstrates how adding value to a commodity moves it to become a product or service, to packages of goods and services, to experiences, and to love, at the same time allowing you to increase the price for what you provide.
Adding Value to Popcorn
When my brother in Iowa raised popcorn (a commodity) on his farm, he was paid 10 cents a pound when he harvested it. If you go into a grocery store and buy a bag of un-popped popcorn (a product), it will cost you $1.50/pound. If you purchase un-popped microwave popcorn, it will cost you $3.15/pound. Purchasing a box of popped popcorn with nuts and chocolate (a premium product) will cost you $7.50/pound, and that box of popcorn you buy at the movie will cost you $15/pound (an experience). Do you remember what price my brother received just off the farm? It was 10 cents/pound. So adding value to the popcorn increased the price of the popcorn by not 150%, but 15,000%!
By the way, Marion, Ohio has taken the commodity of popcorn to a new level, creating the largest popcorn festival in the world, attracting crowds in excess of 250,000! See Marion Popcorn Festival - the largest popcorn festival in the world. This is truly a breakthrough experience, starting with a commodity.
Happy Birthday Mary
Here is another example: when I was growing up (our daughter would say before the Civil War), my mother would purchase the ingredients for a cake (a commodity) to bake for my birthday. The ingredients may have cost her $0.25. Today you can buy a cake mix in a box (a product) for $1.50 or a cake for $12. For $25 you can order a cake with “Happy Birthday Mary” on the cake from the bakery (a premium product). For $200 you can have someone bring cake, ice cream, plates and spoons, balloons, and party favors to your house (a package of services and an experience).
For $600 they will bring a four pony carousel for the kids to enjoy (a premium experience), and for another measly $150/hour will bring along a camel. Really! To achieve the LOVE level, you fly your kids and their friends to Disney World for four days ($6,000). You will create experiences that generate loving memories (and spoil them rotten). I mean – what would you do to top that next year – fly to Europe? But Disney World is successful because they create experiences that children and their parents really love.
Adding Value to Wild Hogs
In many states, wild (feral) hogs are a real problem. They reproduce like rabbits and can destroy a farmers’ field in a short amount of time. So how can you turn a negative into an asset that adds value to the community? Hats off to the people of LaSalle County Texas, who host the LaSalle County Fair and Wild Hog Cook-off every year in Cotulla Texas. Not only does it draw people to the community for this enjoyable event, it provides an incentive to reduce the population of feral hogs. Smart folks, those Cotullians.
In Part III of this series, we will explore how to achieve the Love level, in which price is largely irrelevant.