Value Trumps Price in Effective Marketing

In the world of sales and marketing, we often hear the terms “value” and “price” used interchangeably. Specifically, many people think that the lowest price option is the best “value” because it’s the cheapest. That may be true in the narrow context of commodities – $100 for X amount of ABC grain is a better value than $150 for X amount of XYZ grain, because for true commodities, there is no difference between ABC and XYZ brands. But for non-commodity products and services, value and price mean very different things, and marketers need to be aware of the difference.


Price is the more straightforward of the two terms. Price is simply the amount of money that must be exchanged to acquire a good or service: $25,000 for a car, $10 for lunch at a restaurant; $300 for an airline ticket, etc.


Value is a bit more complicated than price, but a fairly basic concept. As Ralf Leszinkski and Michael V. Marn write for McKinsey & Company, “’Value may be one of the most overused and misused terms in marketing and pricing today. ‘Value pricing’ is too often misused as a synonym for low price or bundled price. The real essence of value revolves around the tradeoff between the benefits a customer receives from a product and the price he or she pays for it.”


A key word in the definition from McKinsey is “benefit.” That benefit can come from a number of different sources: re-sale value, status symbol, functionality, usability, customization, durability, consumer taste, relatively scarcity, superior service, etc.


So, how do these two terms differ in practice? Let’s take the example of a $25,000 car. If that car is a used 1990s-era sedan with 200,000 miles, paying $25,000 for it doesn’t provide a very good value. But if the car is a brand new Lamborghini, that’s a great value. In both cases, the price is the same, but the benefit the customer receives is vastly different. The Lamborghini conveys greater functionality, durability, status, resale value, etc.

It’s important for marketers and salespeople to fully understand the difference between price and value and be able to speak in the language of both, especially value. Being able to show superior value to a customer allows you to justify a higher price and retain and attract customers with comparable or higher prices than your own.

Be cautious, though, about making assumptions related to what you market values—or attempting to convince them that what you value, or believe to be exceptional, about your product or service should also resonate with them. You must take a consumer-centric approach to defining and conveying value.

It’s not about what you want to sell. It’s about what they want to buy!

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Strategic Communications, LLC, works with B2B clients to help them achieve their goals through effective content marketing and management with both internal and external audiences. We are adept at evaluating and analyzing communication efforts and working with clients to plan, create and publish high-quality, unique content, through both on- and offline media to achieve desired results. Our background in business journalism, marketing, PR/media relations and online communications makes us well-positioned to serve the needs of 21st-century marketers.

We serve clients who are looking for help creating content for a wide array of channels—from social media posts to full-length manuscripts, and everything in between. We focus primarily on service-related B2B topics and work with a number of independent consultants interested in building their thought leadership through online channels. For ongoing content management, our first step is to fully understand your goals, objectives and competitive landscape.

Then we’ll conduct a thorough analysis and assessment of your digital presence, compared to competitors, and recommend a communication strategy to achieve your goals. But, we also regularly take on individual projects – white papers, blog posts, contributed articles, etc. If you’re interested in learning more, let us know!

(Strategic Communications is certified as a Woman-Owned Business Enterprise through the Wisconsin Department of Administration.)

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