Clayton Christensen on why customers pay a premium, or: bad products are expensive

If you hire a product to get a job done and it doesn’t do the job well, then you have to take it back, or throw it away, or give it away, or repair it, and go out and find something that will do the job well. And if that doesn’t do well then you have to test it, and talk to your friends…

When you find yourself buying a product and find that it doesn’t do the job well, it is very costly to find something that does it well. And that’s the reason why it can be so profitable if you organise around a job to be done: because customers will be delighted to pay a premium price for your product because the alternative – of something that doesn’t do the job well – is very costly.

Clayton Christensen – Where does Growth come from? (Talk at Google)

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