When trying to sell your product or service, the value that it provides to your customer is essential. The problem is that the true value is largely irrelevant — it’s all about the value that your customer perceives.
The idea of Exchange Theory is that the perceived value of an item must be more than the perceived cost of that item. I heard David Salyers speak recently (he’s the former VP of Marketing at Chick Fil-A), and he summed it up nicely:
Customers want a value imbalance in their favor.
Value and cost are subjective
It’s easy to think of money when it comes to cost, but both value and cost can be seen in a variety of ways:
When we’re building a website for a client, their main cost is financial. However, it’s also going to take a good bit of time on their part, and that certainly weighs heavily into their decision as well.
The $5 bottle of Coke
Situations can matter a lot too. Years ago, our family spent a very hot day walking around parts of Stone Mountain. At some point we stumbled upon a tiny gift shop, and we were parched. They had a cooler with normal 20oz bottles of Coke, but they sold for $5/ea. That was $20 for the four of us, and it was the easiest money I ever spent. We were so hot and thirsty that the value of those Cokes was sky high.
Whatever it is that you’re trying to sell, you have two levers you can play with. You can work to make the perceived value higher, or make the perceived cost lower. As long as customers perceive things as being imbalanced in their favor, you’ll win.