Pricing of your services is one of the most vital decisions you can make in your business. Buyers assess the perceived value and price of a service before deciding what they are willing to pay.
Definition of Value and Price
According to the Merriam Webster Dictionary, value is defined as:
“a fair return or equivalent in goods, services, or money for something exchanged”
“the monetary worth of something”
“relative worth, utility, or importance”
Merriam Webster defines price as:
“the quantity of one thing that is exchanged or demanded in barter or sale for another”
“the amount of money given or set as consideration for the sale of a specified thing”
On the surface, it appears that the definitions of value and price are similar. However, in the mind of the buyer, they are very different. While the price of a product may be the same for everyone, the value varies. Each buyer has a very different value for a product. It’s only when you are able to equate its value with the price that you can make a sale.
Zig Ziglar, the famous salesman, wrote,
“Price is a one-time thing and Value is a lifetime thing.”
Two Types of Customers
There are basically two types of customers in every market. These two types are customers who shop for quality and those who shop for price. According to research that the Journal of Consumer Research published in October 2012, consumers make different conclusions about the same service. For some consumers, a low price can equate to either good value or low quality, whereas a high price can signify poor value or high quality. The study implies that consumers rarely have complete information about a service, so they form “naïve theories” or common sense explanations such as the assumption that a popular service must be of high quality.
The price of a service can influence consumer perception of value. For example, consumers may perceive a more expensive product as higher quality than a lower priced product, yet they may perceive the lower priced product as providing more value.
However, lower prices do not always equate to greater value. If a consumer believes they are getting a good deal, then lower prices can help get you the sale. On the other hand, low prices can also give the impression that the product is of low quality.
So where does ILLUSONZ MOBILE AUTO SPA fall in Pricing vs Value? We can see why many clients may think our price is high but we provide a lot of value in our services because we do not use products based on a trend or what is popular on social media. We use exclusive products that provide a result and give your vehicle more durability on the road and we always go the extra mile + returning clients receive perks to keep your vehicle looking it's best.