Oscar Wilde is credited with the quote “The cynic knows the price of everything and the value of nothing.”
Today, many of us confuse the meaning of the word “value” with the word “price”. Or maybe the word “cost.”
Speak to a group of marketing people and I’d bet that most of them would tell you that for something to be perceived as having a high “value for money” rating, it needs to either be either:
- Cheaper than the competition’s offering;
- Offering “more” than the competition offers.
Selling your widgets 25% cheaper than the ones sold by the guy down the street doesn’t mean that everyone’s going to buy your widgets and no-one’s going to buy his. The fact is, nobody would buy any product or service – at whatever price it was sold at – if, in their minds, they didn’t see its ‘value.’
Price is what you pay. Value is what you get.Value has little to do with price. If it did, nobody would buy an Apple computer, or a BMW automobile, or an IWC watch. Every brand that exists today has ‘value’ to someone.
The only reason that a product or service absolutely needs to be cheaper, or offer more for less, is when it is deemed to be a commodity. When it has no other inherent communicable “value” that its market would pay for, other than its price in relation to the competition.
In order to prevent your business value from being commoditized, it’s essential to create value in the minds of your audience. Enough of a value that they’ll pay good money for your offering.
It’s about creating a brand – the focus of companies like Apple, BMW, and IWC.
It’s not about “25% extra free.”