Price is a Number, Value is a Benefit

In our cash strapped times all we seem to hear about is the need for competitive pricing and offering consumers good value for money. These deceptively simple phrases conveniently hide the fact that ‘value’ is a very relative term which is used – and interpreted – in very different ways.

The relationship between ‘value’ and ‘price’ is not a straightforward one. John Lewis and Waitrose are both premium brands which have managed to position themselves as offering customers ‘good value’ despite their price tags. Their offer is centred on great customer service and confidence in the origins and quality of their products, which goes a long way to justify the added expense.

For many consumers ‘value for money’ means investment. The initial outlay may be high, but the longevity of the product and little need to maintain it means that a saving is made in the long run. We can see this across a wide range of categories from white goods (Bosch: ‘Invented for Life’) to groceries (Florette: ‘Fresher for Longer’). And which one of us girls has not at some point tried to justify those expensive boots (bag/coat/etc.) by claiming that they will last for a decade longer than the cheaper alternative?

It is hard to pin down the value of something unique – which is why some brands use tailor-ability to add value to their offer. Moonpig.com has pioneered personalised cards, whilst Nike ID enables customers to custom-make their own trainers. Such flexibility produces products that make consumers feel special, and this emotional feel-good sentiment is impossible to define in monetary terms.

Consumer need for ‘value’ but reluctance to pay more for it has recently given rise to some interesting communications.

In the context of current supermarket warfare ‘value where it matters’ is a strong tag line. If Sainsbury’s wants to keep its position as a somewhat premium brand, it cannot scoop down to merely price-matching Asda. Focus on ‘Value’ rather than ‘Price’ keeps customers thinking about the benefits of good food rather than their price tag.

British Airways are similarly at pains to defend their apparently higher flight costs in the face of budget airlines such as EasyJet and Ryan Air. Their latest ad campaign is an aggressive defence move which seeks to show how low cost flying fails to deliver on ‘value.’ Moreover, BA’s ‘value calculator’ demonstrates how EasyJet and Ryan Air’s potential extra costs can rack up the overall journey price in a way that actually makes flying with British Airways cheaper.

To conclude, some aspects of ‘value’ are emotional, whilst others – such as longevity – are rational. But whichever principles you choose to adopt to demonstrate the value of your brand do not forget:

PRICE IS A NUMBER ON A TAG. VALUE IS THE BENEFIT TO CUSTOMER.