Price v.s Value

Did you ever look at the price of an item and decide that ‘it’s crazy’ and ‘not worth that price!’? We all have, but in many circumstances we don’t take into account the work that it has taken for it to get to the shelf in front of us and how all of these steps along the way add to the final price we pay.

PRICE

Price is the amount given as payment by one party to another in exchange for goods/services; but what does it reflect? It all depends on what you hope to achieve from this product, how much benefit it will add to you/your life or your business. If it brings great value, you should be willing to pay for it.

VALUE

Value is something that is regarded as having importance, benefit or of high esteem. These qualities are built up from a process of hard work and high underlying costs, explaining why high value is often reflected by high price.

Which is more important?

As the seller, the main questions you need to ask yourself are; does the price of the offering reflect the value the customer is receiving? Are you maintaining quality standards and constantly working to improve on what you are offering?

If you are answering these questions positively then you have no reason to question lowering your price. In certain circumstances a lower pricing structure is seen as a sign of low quality, so stick to your guns, if the service provided is of great value don’t lower the price unless it is totally necessary.

If you are the buyer of this product or service you need to stop and think about what is important to you. If you are buying a car or a house would you want the lowest price or the best quality?

I would take a stab at quality in the form of security and reliability. In everyday life however, only you are affected. Who does it affect in terms of business? Do you really want to reduce security and reliability in your business?

It goes without saying there will always be a cheaper option, but at what cost? It is usually at the cost of quality. In the vast majority of cases however, decisions are based on pricing in total isolation from any other criteria, especially quality. Unfortunately, allowing quality to slope in order to save money leads to a lot of rework and a higher cost as a result.