The best explanation I have read on the value of services or products is encapsulated in the equation:
Perceived benefit minus perceived sacrifice
Perceived benefit is what a person thinks they will get out of a product or service
Perceived sacrifice is what a person thinks they will have to sacrifice in order to get a product or service.
The best part of this equation is the “Perceived” part. It doesn’t matter how good you think your product is or how valuable your product is, it is the perception of the person buying your product or service that is important.
For me, this changes my understanding of marketing. With this formula marketing simply becomes helping clients perceive the benefit of your product and helping them understand and work through their sacrifices in getting the product.
Helping clients understand the benefit is the easier of the two. You understand the benefits of your product or service. The benefits need to be communicated to your clients in their language. The perceived sacrifice is the more difficult part. You need to understand what the client’s perceived sacrifice is and then help them to overcome it.
In the end, it is the perception of the client that is important.