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Enhanced Capabilities

When marketers determine pricing for an organization’s products, they take into account workers’ capabilities in manufacturing that product and factor in the workforce’s efficiency. But as workers become better at producing the product through time, pricing will start to fall, as the company can manufacture higher volumes of product at an increasingly more efficient rate.

Confusing? Okay, let’s take an example from the computer industry. A decade ago, it was not unusual to pay $2,500 for a basic desktop computer. Today, you can find quality desktop computers with significantly more features and memory than their predecessors—and for less than $600. Why? The industry’s workforce has increased its capabilities in manufacturing personal computers to the point where they are efficient enough to produce more at the same, or less, cost than they did a decade ago.

As a result, the computer industry is now able to offer computers at a more affordable price, so that more people can afford to buy them. And that means higher sales revenue and potentially higher profits.

The point is that as people are exposed to new ways of working and become more capable over time, they bring greater value to the company—and can even help it expand into new markets.