If you are a sports fan, one of the things you love about the athlete’s passion for doing the sport. In reality the athlete has spent years fine tuning their craft and really enjoyed the sport they are playing. It helps if the athlete is making enough money that it is their full-time job. Watching those players, others want to play the game and if they really enjoy playing, you can see the passion they are playing with. Everyone wants to bottle that passion or tap into it.

One of the ways to tap into passion is what author Adam Davidson’s book titled The Passion Economy, published by Alfred A Knopf, NY, 2020.

Rule #4 Fewer Passionate Customers are Better than a Lot of Indifferent Ones

Value pricing requires selling to the right people The business is open and has clients, do all the clients see your value? Do you spend enough time and effort on your clients to add value to them? Maybe you have too many clients?

Don’t say good-bye too quickly Remember you need to pay the bills and allow you to live your lifestyle. At least once a year, go through your client base with your team. You should expect to find that about 10% are no longer appropriate for the firm. Often, you will find that these clients cost you money. The cost is the time and effort between expectations of the client and what you are prepared to offer.

The best customers, eventually, are the ones who seek you out Clients will seek you out based on your reputation, they are the ones you want to keep. Their expectations and your are similar.

Your passion, pricing, value, and target customers are all different views of the same riding.

Rule #5 Passion is a Story

Whatever you’ll selling, you’ll selling a story, and it better be a true one

Value is a subjective measurement of how some product or service makes a person’s life better. It is a story.

Always tell the truth lying is bad for business, tell the truth

You can and must tell your story, especially if you’ve bad at telling stories A truthful brand, built on passion and real value, tells a story.

The story is told in every detail of your business When you have a passion business, you embed the vision into every aspect of the interaction with customers.

Rule #6 Technology should always Support your Business, not Drive it

Using the right technology can be a boon to you in this economy. Great software can help you better manage your business. In this age of technological advances and automation, personal relationships in business are more crucial than ever.

Do what technology and large industry cannot do – not the same thing, only slower If your core customer cannot easily distinguish your products or services from a larger competitor, you need to shift and offer something else.

Technology-driven scale creates the space for businesses built on value and passion. Businesses built on great scale, by necessity, cannot rightly engage narrow audiences.

Technology trends toward biggest, so stay small If you richly serve a small niche in a way that is hard to scale, no big company will ever think to go through the expense of identifying so small a market and serving your customers’ rather particular needs.

Rule # 7 Know What Business You’re In, and It is Probably Not What You Think

The core thing you are selling is the real value you can bring to a customer who carves your offering.

The ability to book flights and trips online vastly disrupted the travel agency business. Travel agencies shuttered their doors in droves. However now there are new companies by creating personalized travel experiences. They are selling their knowledge.

Change your value capture constantly. Change your value creation slowly

How do you get paid? it was cash, check, credit card but now can be e transfer and a host of other ways. Adapt to it.

Value creation is the core of your business. Treasure it, tend it, change it only quite slowly and deliverately.

Rule #8 Never Be in the Commodity Business, even if You Sell What Other People Consider a Commodity

A commodity is an undifferentiated product that is easily copied and replicated by others. Commodity business are price takers, meaning they get paid whatever the market price happens to be. The only way for them to be truly successful is with volume and an ability to produce more cheaply than anyone else. That’s why commodity businesses tend to be dominated by huge, global corporations that use automation and outsourcing to cut their costs to the bone.

Passion businesses never sell commodities. By definition, a passion business differentiates itself from others so that it can charge a unique price that represents its unique value.

The rest of the book has some wonderful examples of how companies made the transition and it did take time and effort and creativity and whole gamete of emotions to do it, but now they are thriving.

Example Braun Brush – manufacturer of brushes

We all have brushes in the bathroom and kitchen to clean things, as a tool it makes life easier. If you go back to the 1900’s the brushes were originally made in Europe but then they were made in America. Factories were built, brushes were sold and communities benefited. At some point in the 1980’s things began to change as companies began to import items from China and Hong Kong. At first the brushes were cheap and fell apart so the American companies had a competitive edge. The Chinese companies became better and less expensive as they mass produced and the brush market shifted to Chinese brushes. The American factories could not compete and most of them began to shorten their lines and eventually shut down.

One company, Braun Brush was going through the same process, however the son who inherited the business, had interests in sculptor and the arts. He was in the business but not thrilled however he became an expert in various types of bristles and brush handles.

He convinced his father to invest in a computer and a new machine to both have mass produced brushes as well as the ability to customize orders. The inexpensive brushes made most of the sales of the company, but the specialty brushes had the highest profit margins. The custom brushes were designed for customers with very specific needs and there was no other competition so prices were high and the companies were willing to pay for their needs. For example think about the nuclear power plants – they need brushes to clean but the bristles have to stay on the brush.

The company designed a brush that no bristle could escape. The cost is more expensive, but the nuclear industry saves millions because of the brush, they are willing to pay more.

The Passion Economy business people should aim for: a product whose price is determined by the value it provides the customer, not by the raw material that it is used to make,

Not surprisingly, Braun also makes brushes for the space industry.

Braun can make 15,000 types of brushes with a staff of 30 brushmakers. He also sells various unique brushes that are tailor-made to the specific needs of a tiny customer base. The owner loves the business and his passion allows to make good brushes. He is also curious, for example with the rise of big technology companies, he wondered how can I sell brushes to them. Technology companies have very specific needs, and Braun is meeting their needs.

It is possible to be successful if you have expertise, curiosity, creative thinking and the ability to listen to what other people want. How can he help the customer solve their problems, or he is in the solution business.

To charge premium prices, Lance of Braun Brushes has to truly solve the customers problems in an enduring, measurable way. Lance has to combine the best elements of the 19th century (artisanship and tinkering) with those of the 20th century (scale).

Another example is Wray Ward Advertising Agency or the service industry

Wray Ward is an adveristing agency based in Charlotte, North Carolina. It had been a typical regional market agency, working for whichever business happened to be around. It could be the Banks headquartered in the area or a local furniture manufacturer or the needs of the large energy producer.

The problem was local clients were shifting to global firms based in New York that offered all sorts of benefits and discounts. Wray Ward went through a process of what industry did they love or why were they different than the New York companies and they could compete with the big guys? The process took some time but the company decided they loved the furniture and home furnishings business. It helps North Carolina has thousands of big and large firms in the business but no advertising agency focused on this segment.

Wray Ward became experts in the field as they began to narrow their client base, remember you need to pay the bills. The transformation allowed them to focus on a specific client and to charge more for their services. The were able to bring a depth of specialized knowledge, insight, and data nobody could match. Wray Ward essentially became a central partner in a furniture company’s business strategy.

Wray Ward is more expensive, but the client no longer has to pay for expensive subscriptions to customer data providers; the client does not have to monitor competitor’s marketing and advertising campaigns or they save time and money.

There are many other stories in the book on various industries and one or two will catch your imagination and your will remember. The stories revolve around asking yourself what are the set of things I know how to do and who would benefit the most from those things? How much, in real dollar terms, would they benefit? How can I frame what I do so that those people clearly see the benefit and agree to a price based on value,

The answer comes slowly and it takes some internal soul-searching and lot of experimentation. However, the benefit to you is work is more enjoyable as you solve problems and your home life is better.

Linking to dividend paying stocks, we all want to invest in companies that besides make profits solve problems for people. If they are solving problems, then people are willing to pay for the product or service. If they see the benefits and see what they save, they can pay more. If they pay more the companies can make profits and pay dividends, you are happy. Much of the book is focused on small and medium sized businesses, however if you invest in a large company, you have to understand how it makes its money. Does the business plan make sense to you or are they better alternatives?

There are more questions than answers, till the next time – to raising questions.