How to Distinguish Price From Value

𝗣𝗥𝗜𝗖𝗘 𝗶𝘀 𝘁𝗵𝗲 𝗠𝗼𝘀𝘁 𝗜𝗺𝗽𝗼𝗿𝘁𝗮𝗻𝘁 𝗼𝗳 𝘁𝗵𝗲 𝟰𝗣𝘀 – 𝗔𝗻𝗱 𝗶𝘁'𝘀 𝗺𝗼𝗿𝗲 𝘁𝗵𝗮𝗻 𝘄𝗵𝗮𝘁'𝘀 𝗼𝗻 𝘁𝗵𝗲 𝗽𝗿𝗶𝗰𝗲 𝘀𝘁𝗶𝗰𝗸𝗲𝗿. Both decades of research work and almost any MMM modeling will consistently show that "Price" is a vastly more powerful driver of market response than anything done with advertising or messaging (Promotion) This is because there's a strong connection between active market demand and current market pricing. Shifts in perceived price can dramatically increase the demand for your product by activating latent market demand. --- But this can't be done by simply cutting your price in half because the purpose of the business is to make a profit! Many marketers have a naive view of price as being whatever's on the pricing sticker or the website pricing page. This is a TINY fraction of what the buyer perceives as the "cost" of acquisition. In B2B there are other costs that typically outstrip the initial direct price of the product. Such as: 1️⃣ The direct cost of acquisition (those folks in Legal red-lining your purchase agreement don't come for free) 2️⃣ The cost of installation 3️⃣ The cost of data migration 4️⃣ The cost of systems integration to other platforms 5️⃣ The cost of staff and training and adoption --- But there's also the even more powerful issue of cost-per-value! How does your buyer ACTUALLY perceive the utility they expect to get from your product? And how do they price that utility? For example...for exactly the same brand of beer, which is "cheaper": The one that costs $4 or one that costs $20? If you answered, "the $4 one", then you're not looking at the full picture. That $4 beer is one can...that $20 beer is a case of 24. It's about "value per unit of utility", not the sticker price! --- Almost 100% of ALL successful technology products are successful not because they are new or innovative but because the product has leveraged technology to fundamentally deliver massively more value for the overall TOTAL COST OF ACQUISITION. 👉 All successful technology plays are pricing plays! The classic example was the introduction of the Apple iPod. The iPod cost 1/3 more than the incumbent product (the Sony Discman), but NO ONE valued the iPod based on its retail sticker price. They valued it based on the problem it solved (which Apple brilliantly spotlighted) ➜ How many "songs in my pocket" at what price? Even at $400 vs. $300 for the Discman, the VALUE per unit of cost the iPod delivered was SEVENTY-FIVE TIMES greater. The Discman costs $30-per-per "song in your pocket" (and you needed a really BIG pocket) vs. the iPod, which costs merely 40¢-per-"song in your pocket...a 75x reduction on cost-per-unit-of-utility. And within four years, Apple has captured nearly 100% of the portable music device sector. The iPod was a MORE expensive product that won on a pure pricing play! This is the power of understanding what the 4Ps really mean and how to deploy that as marketers.

Most businesses believe that pricing leadership means charging more. But that’s not leadership. That’s guessing. True pricing leadership is rooted in clarity — not cost. Here’s what that actually means in practice: ☛ You know what your market truly values. → Not what you think they value. Not what your competitors charge. You listen, research, test, and learn what your buyers care about most and what they’re willing to pay for it. ☛ You stop pricing based on time or features. → Instead, you anchor your price to the outcomes your product or service helps deliver. Time-based pricing punishes efficiency. Feature-based pricing ignores value. ☛ You align every offer with measurable results. → When buyers see how your solution connects to their success ROI, time saved, revenue gained, stress reduced — price becomes a logical conclusion, not an objection. ☛ You stop justifying your price, and start communicating your impact. → This is where confidence meets clarity. Great pricing doesn’t need defense; it tells a story the right audience already believes in. Want to stand out in a crowded market? Don’t raise your prices. Raise your standards for how strategically you price. #PricingStrategy #ValueBasedPricing #ProductMarketing #ConsultingBusiness #MarketPositioning #B2BSales

First reminder: deals aren’t lost on price. They’re lost on the *relationship* between price and *value* (talk tracks below) Second reminder: while “value” is primarily the outcome the solution delivers, it’s also the challenges it solves, the way it addresses the customer’s potential objections (e.g., “hard to use?”), how trustworthy you and your results are (e.g., do you have lots of credible references?). Third reminder: any time you’re talking about price (presenting it, negotiating it, ballparking it), *always* connect it to value. Customer: how much does it cost? You: typically, our customers are seeing revenue uplift of around $500k / yr and all the manual steps we’ve been talking about in the current workflow are totally automated. And they’re spending between $40k - $60k / yr to get that $500k, depending on exactly how we scope the partnership together. Customer: the other proposal we have is $10k less, can you match? You: okay. Question for you – can we talk through the two options side by side to make sure the comparison is apples to apples? We are usually about $10k more expensive because both the revenue uplift from our platform is higher and the automation is so much better making it take muchhh less time to use day to day. Putting price aside for a second, how are you thinking about the differences in how the two of us are ultimately going to actually work for you once up and running? -- Discussion question: What are other important places/ways to strengthen the relationship between price and value? -- And if you like this really tactical stuff, I’m sharing essentially my entire playbook for free on LinkedIn day by day (lots of example talk tracks, emails, disco questions, etc). If you scroll to top right of post there’s a follow button if you want to see more in your feed.

Are You Protecting Your Price — Or Negotiating from Fear? "Every time you drop your price too quickly, you’re not negotiating. You’re telling the buyer you don’t believe in your own value." The difference between defending your worth and discounting it away isn’t the market, it’s confidence. One anchors value so strongly the buyer sees the price as a bargain. The other hesitates, and the buyer sees a target. The gap often lies in: - How early you position value. - How clearly you connect price to outcomes. - How much you believe in the price before you say it. Here’s how to protect your price and sell from conviction… 1. When Quoting a Price ↳ Instead of "Our price is $X… but we can work something out." ↳ Say "Our price is $X because it protects revenue, reduces risk, and drives measurable ROI." 2. When Facing Pushback ↳ Instead of "We can lower it a little." ↳ Say "Let’s revisit what this solution is worth to your business over the next 12 months." 3. When Presenting Value ↳ Instead of "Here’s what we do." ↳ Say "Here’s what you gain and what you avoid losing by implementing this now." 4. When Compared to Competitors ↳ Instead of "We can match their price." ↳ Say "We outperform their results and here’s proof from customers just like you." 5. When Hearing Hesitation ↳ Instead of "What if we discount to get started?" ↳ Say "What’s the cost of delaying the results we’ve already agreed are critical?" 6. When Sending a Proposal ↳ Instead of "I’ll send over the numbers." ↳ Say "I’ll send you a proposal that captures the exact outcomes we discussed and why they’re worth it." 7. When Talking About Cost ↳ Instead of "I know it’s a lot." ↳ Say "This is an investment that pays for itself many times over in savings and growth." 8. When Negotiating Scope ↳ Instead of "We’ll just meet in the middle." ↳ Say "If budget is the issue, let’s adjust scope while preserving the results you want." 9. When Closing the Deal ↳ Instead of "We’ll take whatever you can do." ↳ Say "We’ll move forward when we’re aligned on both value and investment." 10. When Leading the Conversation ↳ Instead of "I hope this works for you." ↳ Say "I’m confident this is the right solution at the right value for your business." - Good salespeople defend their price. - Great salespeople make their price undeniable. - Good salespeople answer objections. - Great salespeople remove them before they appear. Lead with conviction. Defend your worth. Sell like it’s worth every penny... "Lead Different. Sell Smarter. Win with Purpose." --- ♻️ Share this with a sales leader who needs to hear it and follow me for more strategies to grow your team…👇 👉 Follow me on LinkedIn: [https://lnkd.in/eejPkWvX) 👉 Beyond The Funnel Newsletter: [https://lnkd.in/eXTPWb9p) 👉 My latest e-Book: [https://lnkd.in/eUcc_Mzr) PS: Thanks for reading!

One of the biggest challenges we had in implementing a value analysis early on was we were using a price/ cost analysis synonymously with a value analysis. These are two different measurements. Price is what you pay, value is what you get. Cost analysis measures the cost of the program. The error is typically driven by narrow or not enough discovery early in the process. You have some, but not all inputs. A value analysis measures both the costs of the program and the projected value realized from the program. You get a value analysis through deep and layered discovery. Understanding both the shallow cost inputs and the deeper layers of value that will be received through a strong implementation and execution of the program. A value analysis is going to measure the full financial impact of the purchase. Avoid sticker shock by doing deeper and more rigorous discovery. #Sales #SalesLeadership

Several month ago my wife hit a deer while driving my car. She was fine (the deer not so much). However, the car was totaled and needed to be replaced. When I was looking at new cars and comparing their prices, I wasn’t concerned with how much it cost the auto manufacturer to make the car. I didn’t care how much they spent on R&D to design it. I didn’t care how much the materials that made up the parts of the car cost them. I didn’t care about their utility or real estate costs. And I didn’t care how much they had to pay the workers on the assembly line, the shift managers, or the plant janitors. The only thing I cared about was whether the cost of the car felt aligned with the value I felt the car would provide me. The amount it costs you to provide legal services to your client is irrelevant to them. Your clients don’t care about your office expenses. They don’t care how much you spend on toner, computers, or fancy pens. They don’t care how much you pay for rent or utilities. They don’t care how much you pay your staff or the particular lawyer that worked on their matter. The only thing your clients care about is whether the cost of your services is aligned with the value they feel the services will give them. You trying to explain that what you charge is based on your costs doesn’t change the value of the services to the client or the value of the problem the client is facing. Value determines price. The value to the CLIENT, not to YOU. And if you can't charge a price that is aligned with the value to the client and profitable to you, then you and the client aren't a good fit. #LawPractice #Value #Pricing #CostsDontMatter #NML