Price (mathematical) and Value (context)

Price: “The amount of money or goods, asked for or given in exchange for something else“.
Price is a very simple mathematical concept.

Value: “The desirability of something, often in terms of usefulness for exchangeability; an amount of money considered to be a fair exchange for something; something worth the money it costs“.
Value can only be determined in context.

Whenever we buy something, it’s because we expect more back in return. That value,  that “return on investment” isn’t always simple math. Intangible, emotional benefits like “piece of mind” play a greater factor than we often realize. Depending of the context the benefits obtained on the purchase, in other words, the value, may differ significantly.

If those benefits don’t outweigh the cost (in our mind, that is), then the price is too high. Value, like beauty, is in the eye of the beholder.
Value is relative because different people have different needs.

On the other hand, price isn’t determined by value, it’s determined by the intersection of supply and demand:

Demand: the amount of a product customers are prepared to buy at different prices.
Supply: the amount of a product businesses are prepared to sell at different prices.


If the price is too low, sellers will not sell. If the price is too high, buyers
will not buy. Price is the point where both sellers and buyers are happy with the price and quantity.

Summing-up: How to we become more valuable in the eyes of our prospects? Simple. Help them get what they need; instead of asking “How can we sell this?” we ought to be asking “How do we want our customers to feel after they’ve bought this?

Warren Buffet said “Price is what you pay. Value is what you get“.
Something is only valuable if it solves a problem or answers a specific need.
We have to work to give the most valuable product to our clients, … and the sooner the better.

These Notes have been taken from:

Leave a Reply

Your email address will not be published. Required fields are marked *