A common question business owners have is how to add value to your company.
A company that offers a more valuable product/service can charge a higher price.
However, value is based 100% on perception.
Just take a look at the Masters Golf Tournament held each spring in Augusta, Georgia.
Last year’s winner, Jordan Spieth, took home $1,800,000 but, more importantly, he took home The Green Jacket.
The players, commentators, and commercials will all talk about The Green Jacket while none will mention the prize money.
How much does the Green Jacket cost Augusta National to make?
You would think the jacket would be pricey considering how much publicity and recognition it receives.
However, Hamilton Tailoring Co. of Cincinnati makes the jacket for only $250.
So, why all the fuss?
The Green Jacket is a part of something larger than the cost to produce it.
It’s a central piece of a long-standing ritual for Augusta.
Here are some Green Jacket rituals:
- Last year’s winner will ceremoniously put The Green Jacket on this year’s winner
- You are allowed to wear The Jacket anywhere for one year, but it must be kept at Augusta after that
- When you win The Jacket, you get to decide the menu of next year’s Champions Dinner
The scarcity of The Jacket combined with these rituals raise the perceived value of this piece of clothing.
Other golf tournaments have trophies and prize money, but they don’t have the rituals that come along with winning The Green Jacket.
The Green Jacket effect is a real thing and you can apply it to your business.
Maybe your business isn’t quite as glamorous as The Masters.
You can still create little rituals that enhance experience.
Fortune cookies are inexpensive, but have become a ritual we come to expect with our Chinese takeout. It enhances the value for the end user and increases our chances of purchasing the takeout again.