People often confuse value with price. What is the difference between the two and why is it of any consequence to you? Shouldn’t they both go hand in hand? That’s not necessarily so let’s explore why.
The Eye of the Beholder
What is the first question people often ask when they want to purchase something? “How much does it cost?” And, that’s only after we’ve turned the object over and over looking for the price tag. In today’s economy, the concept of value and price has gotten trapped together. They are not synonymous. You may wonder why some people are still buying expensive items when most of us are counting our pennies and trying to keep every available coin in our pockets. The answer might lead to the truth about value and price. Price is just that – a dollar amount assigned to an item or service. It usually reflects the going rate locally or globally. As a business owner, you want to stay competitive without alienating your target customer base. It’s a matter of profit as well. If you come in too low, then you are undercutting your own business and you will lose money. Value refers to the significance that we apply to a good or service. It is tied into the perception of your business brand. Honda has built a reputation as a solidly made car. As such, people will invest more in one because it will keep their families safe and they can drive it for a long time. The decision, to buy, moves beyond mere price to what is perceived as the additional benefit that comes along with purchasing this kind of car.
Translating Value
As you work to present your products and/or services to the customer, consider how you will translate the value of your brand as well as the price. Time and time again, business owners who reach their customers on a more personal level with their marketing strategies are delivering value along with their price. If a customer feels that they cannot do without your product, for whatever reason, they will buy and continue to buy despite an economic downturn. So, how do you do that? Look at your products or services and ask yourself a few questions. What can they do for your clients that others can’t? Besides the physical product, what are you also offering your clients that they can’t see? Here’s an example. If your product is organic, it probably costs more, but what are the benefits of that? There are no pesticides used which pollute the land and are dangerous to humans. Families can confidently feed their children without worrying about artificial ingredients. You are promoting healthier children as well as a healthier environment as a bonus.
The Verdict
Is price or value more important? They are not the same, but communicating the value of your products to customers can keep them buying even if the price is higher than the competition. Loyalty may run deeper when you build your brand on value rather than just price.