Value is not an intrinsic property of a good or a service. Value only exists in the perceptions of people. Value only exists in the eye of the beholder.
And why would we pay more for a bottle of water at midday in the middle of the Arabian desert than on a wet Saturday afternoon in Manchester?
Value is not only subjective, it is contextual. This is one of the most important points in the concept of value!
“Value is not an intrinsic property of a good or a service. Value only
exists in the perceptions of people.”
Cause and effect are often confused when it comes to value. Some people dive for pearls because other people are prepared to pay a high price for pearls, not vice versa. Costs do not create value. Value causes customers to be willing to repay costs!
This doesn't mean that businesses cannot create demand for their products. Availability (especially of innovative products) can create demand, but there is no guarantee of customer acceptance just because development and production costs were incurred. Production will only continue if people value the product/service and its price covers the cost of production.
Whereas when it comes to commodities, their market price is determined by the value of the last unit consumed.
If you agree with these thoughts and would like to find out more about pricing your services on the value your customers get out of them so you can make sales without selling and get paid what you're worth, visit www.sws3.co.uk to download 30 more free practical ideas you can implement straight away in your business.
Service providers who charge for their time or their materials, or whose prices are influenced by their competitors can find out how to get paid what they're really worth at www.sws3.co.uk
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