My 11 year old son and his friends are obsessed with luxury cars. They go crazy every time they see a Tesla or a Lamborghini. In fact, I had a friend of mine bring their luxury car to my son’s birthday party recently. All the kids went crazy for it. This obsession with cars has led me to find Singapore’s obsession with Ferraris. The more I learned about it, the more I realized it was a perfect example of wants vs. needs.
What Singapore Wants
So what do Ferraris and Singapore have to do with your business? It might makes sense to you that Singaporeans want Ferraris, because luxury cars are popular across the world. However, Singapore is a small Island with a dense populations and dense traffic. Because of this, there are three main reasons why it makes no sense for Singapore residents to want or purchase Ferraris.
- Singapore doesn’t like cars at all, so they put an incredibly high tax on vehicles. It is 3-5x more expensive to buy any car in Singapore than in other countries.
- Because Singapore is so congested, locations to drive past 2nd gear are slim to nonexistent. This makes sports cars impractical.
- There is a 2+ year waitlist for Ferraris in Singapore. It would be much easier to purchase a different car quickly.
This all illustrates that people buy what they want, not what they need.
What Singapore Needs
I remember that when I was in Italy in 2008, people were driving super tiny smart cars. This kind of car makes more sense in Singapore for weaving in and out of traffic. However, they don’t want that car. They want a Ferrari. It is hard to get, expensive to buy, and inconvenient to drive. However, people buy what they want vs. what they need.
If you were to open a compact smart car business in Singapore, it’s likely your business wouldn’t survive. Instead, you would lose business to the 2 year waitlists for Ferraris. It sounds crazy doesn’t it? These people would benefit from having a tiny car. However, it isn’t what they want.
Do You Serve Customers’ Wants or Needs?
We can learn from this to position our products and services to be what people want, even if it isn’t what they need. This will make our businesses more successful. Consider your products and services. It’s likely that you created them because you saw a need.
Now think about how many people are purchasing and which thing(s) are most popular. Is it the thing people need most or the thing people want most?
If you’re able to see the difference, you can lean into the things people want to create more income!
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