Price and Value: Do you know the difference?

Price and Value are concepts that may seem the same, but in fact there is a big difference between them. You know what each one means and which one to apply to your business.

To explain these two concepts to you, in this article we will explain in a practical way what the difference between price and value is and why this understanding is so essential in sales. This way, you can be more assertive in your approaches and strategies to increase your sales.

Price vs. Value: Understand the difference

Price is the amount of money paid for a given product or service. Value, on the other hand, is what is attributed to your product and what it provides for the customer. Value cannot be estimated in money and can be different for each customer.

We can take car brands like Volvo as an example. Although it is a much more expensive product than the others on the market, whenever a new model is launched there are many people who buy it, because they usually link the car to an esteem they have, a value it provides, which can be status, practicality, quality, among others.

In other words, value can be applied to the experience to be had. At this point, the customer no longer cares about the price of the product, but what it will provide, even if it's expensive. As Warren Buffett explains, price is what you pay, value is what you get.

Now I know the difference between Price and Value, but how do I apply it to my business?

These days, people are increasingly looking for experiences rather than low prices. There are still establishments that use the lowest price strategy and that's not a bad thing, if it's bringing in money it might be a good idea to continue in this way, it's worth remembering that this strategy makes customer loyalty more difficult, but if it's applied it can be very worthwhile.

Use experience to your advantage! If, for example, you have a food business, selling only food is much easier, but maybe you're stagnating and need to change your focus. Bring in new things, use technology to your advantage, stay on top of different content.

In order to offer a value strategy and delight your customer, you need to get to know them in depth, know what they are looking for, what benefits they expect, what product or service they want... With this information you can provide a shopping experience that exceeds expectations and generates a feeling of value for your brand.

The process of loyaltyIt also makes your customers more vulnerable to attacks from competitors, because they know that they will find what they are looking for in your company in an exclusive and impeccable way.

The values perceived by the customer can be tangible, such as convenience, durability, superior quality, customization and also intangible, such as belonging, personal fulfillment, brand, design, as well as the values that the product allows to materialize: high self-esteem or family unity, among others.

Not just selling, but bringing value to your product.

We explain this in more detail on the "customer loyalty" page. It's more cost-effective to keep existing customers than to win new ones, and loyalty isn't just about retaining consumers. It involves building solid relationships, establishing trust and creating lasting emotional connections.

To win over its customers, the company needs to be concerned with all stages of consumer interaction, from the first impression to post-sales.

Although price and value are closely related, they represent different concepts in the world of business and economics. Price is the monetary cost of a product or service, while value is the utility and satisfaction that this item provides to the consumer. Recognizing this difference is essential for making informed decisions, both for consumers and entrepreneurs. By understanding the value behind the price, we can make smarter choices and create more successful, customer-oriented businesses.

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