Another Way to Think About Value
November 8, 2019
Sometimes business owners get confused about value. They think value is tied up in the product they sell or the service they deliver, and that’s where they think value begins and ends.
They think that value is what a customer receives when they consume the product or service. For example, an attorney sees that she has delivered value in the contract she prepares and delivers to a client.
Value is intangible, and because it’s intangible, it’s not bound by time or space. When or where the transaction doesn’t fully define value. Value comes before, during and after a transaction.
The orthodontist who did an assessment on my son delivered value when he showed us what my son’s smile would look like after treatment was completed. My son’s reaction to that simulation—he was thrilled—was value received. I received value from seeing my son’s reaction, and I didn't receive the service! We both got paid in value well before the fitting.
The value the client receives in that attorney’s contract may come long after the document is delivered and signed, when the client thinks “wow, she saved my bacon,” or “he was so easy to work with in that deal.”
Think about it this way:
- Price is what you get paid, whenever payment occurs.
- Value is what the customer gets paid, whenever payment occurs.
©Ray Business Advisors, LLC and John Ray
About me: I’m enthusiastic about how changes in pricing strategy can significantly change profitability for a business and enhance life choices for business owners. I live this passion through Ray Business Advisors, my outside CFO and business advisory practice, in which my pricing is exclusively value-based, not hourly. I work with business owners on how they can change their pricing not just to increase their profits, but better serve the wants of their customers. Click here to learn more or call me at 404-287-2627.