What is value?

Submitted by Corey Smith on Tue, 09/18/2007 - 03:43
I always hear companies talking about providing greater value. But, what does it really mean to have greater value? I bet they don't really know. Value is simply where benefit outweighs cost. Here is a simple chart.

Value is where benefit is greater that cost

As cost increases, benefit must increase. The problem is that every customer sees benefit differently. There is no one formula that can indicate a certain list of benefits will equate to certain costs. The statement of greater value by a business really means nothing. I may not agree with the benefit they provide and therefore don't see any value. Your goal as a business should be to ride the line between "no value" and "value." When you ride that line, you have maximized your profits and optimized the benefits for the customer. If you provide too many benefits, you are leaving money on the table. If you provide too few benefits, you are charging too much for your product or service.

Corey Smith Vice President of Innovation at Fisher’s Document Systems.



Corey Smith is the president of Tribute Media a web development firm providing high performing, industry specific websites. He is a businessman, writer, technology fanatic, graphic designer and web developer. His greatest passion is teaching, consulting and speaking.

You can find him on Twitter, FaceBook, FriendFeed, and LinkedIn.

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Submitted by Justin Beller (not verified) on Mon, 09/24/2007 - 11:43.
I enjoyed this post. I offered up an alternative view of this topic on another blog I maintain at: http://tvcnet.blogspot.com/2007/09/value-is-subjective.html I hope it doesn't come off as overly critical. I was aiming to put it into context of a consultant and his/her profession.
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