PRICE vs VALUE......

A few weeks ago there was a #YellowPad post that was an easy "oh, yeah" --- something so obvious that you could just agree with it and not give it any more attention. But if you let "Price is what you pay / Value is what you get" fall into the pithy sayings pile without revisiting how your business determines what your target markets really value and how you communicate and expand the value you deliver, you missed an opportunity for reevaluation and considering possible business expansion.

Setting a price is simple. You take what it costs to deliver, add the profit you need to make and voila! But value? Value is another thing entirely, because it is the customer who decides the value of what it is you deliver, and customers see value from many different perspectives. And as a business person your job is to fulfill customer needs in a way that creates value for them and profit for you. 

So here is something to think about ---- think of it as "the variables of value":

 > Real or functional value. This is value that saves time or money, improves quality, delivers a solution, fills a need, creates a new way of doing something. Once only a want, it becomes a need --- think dishwasher, cell phones, cars, Uber 

 > Perceived or emotional value. Connects people, creates a sense of belonging, provide fun, affinity, taps into nostalgia or hopefulness, expresses ideals. Takes a product or service past need and into realm of self definition/identity --- a car is no longer mere transportation but a message that tells part of your story.

> Transformational or life impacting value. Is both real and perceived, individual and/or societal. Alters next steps and expands opportunities. A prestige school, a new skill set or ability, a health/wellness advance. It's true --- an Ivy League degree DOES open doors, and so does becoming a first rate X,Y, or Z --- and the polio vaccine DID change the world. But if the ads are to be believed, changing your hair color or Juviderm might deliver some pretty potent transformations, too. 

Now here's the challenge for you, the business person creating and delivering value: 

How do you understand what value drives what target market and communicate in such a way that the customers you want move from satisfied with your functionally fine product to deeply loyal to a product or service that delivers on an emotional level, and can go even beyond loyalty to a kind of missionary zeal where they recommend you and add to your customer base with their enthusiastic endorsements? I am sure we all have companies we sing the praises of, and others we despise. 

If you are serious about expanding your business --- both in terms of expanded markets and increased profitability --- you need to understand the nuances of "price is what you pay/value is what you get" at a level of detail you may not have considered when you first saw it on #yellow pad. But knowing how to define and deliver value that is recognized by diverse customers is vital to your growth.  

#SimpsonandPartners.net