What Is Value?

All American Business Centers | What is value?

By Steve Czerniak, Subject Matter Expert, SCORE of Southeast Michigan

Value is defined as “benefit-per-cost,” or “increase-in-benefit per increase-in-cost.” The Merriam Webster Dictionary defines value as “a fair return or equivalent in goods, services, or money for something exchanged.”

We all want more for less.

We want “cheaper” (to pay less) in the form of price or cost-to-own.

What are the elements of benefit (more) for which we want to get more for less?

  • Better: quality/durability/reliability/serviceability
  • Faster: speed of performance
  • Capable: function; features
  • Experience: treatment; support
  • Looks great: aesthetics

Although, most people inherently know that when you pay more, you get more. We all want something for nothing. Gosh, that doesn’t seem “fair.” My MBA professor said that the only version of that word the applies is FARE. He meant “Pay the fare.”

Sooner (speed of delivery) is one feature for which we want quicker (less) and are readily willing to pay more. For high-ticket items, you just have to wait. Frankly, in most cases, a low-priced version can be had quicker (e.g., a new car).

How can we apply this in the workplace?

  1. Think of the leadership of the organization as customers (goods) or clients (services) of the departments and employees. If this is true, then the same principles of value apply to the performance of work. If someone wants to know how to be a good employee, let them deliver value.
  2. All member of the marketing, sales, concept, design, development, delivery and support team should have this model firmly in mind. This should be built-in and marketed that way.
  3. The price and cost-to-own of goods and services should be benchmarked to ensure that it is competitive.

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