Much is talked about Value, Price and Worth. We are questions like – what is the value of our services to our prospective clients?, what is the worth of what we sell, what price should we charge for our services or products?
But value is not a number.
We spend so much time trying to put numbers around value. Maybe part of the problem is us accountants. We put numbers around the value of a business. But that is a story for another day.
Value is subjective. What I see as of value may not be the same as you. The price I might be willing to pay for an item will differ to the price you are willing to pay for the same item.
Value is always contextual. The context will change our perception of value. The best example that I like is that of Nepresso pods. If we compared the coffee to instant coffee it would seem to be very expensive but Nepresso have changed the context. We are encourage to compare these coffee pods to the coffee shop experience. The value in that context changes.
Value is not a number. Value is not a constant either. It changes based on our perceptions, on what comparisons we make, on where we are in life etc etc.
So before we can start talking about the price you should charge you need to understand the value of your services or products from your customer’s perspective.
Remember value is not a number. It is much more complex.