Everyday each of us will make multiple decisions on how to spend limited resources.
When choosing to invest (and how much to invest) what questions do we weigh?
- What does it cost?
- What is it worth?
- What are the alternatives, what are the costs of the alternatives?
- What value can be enjoyed by making an investment?
Position and price an offering correctly, then new clients are delighted when they buy, the company grows, jobs are created and investors are rewarded!
How do you price an offering? Or another way of looking at it is how would your customer value your offering?
Let’s take an example of a company that is creating a new market here in Seattle and across the nation, Car2Go. Car2Go is a car sharing service that is designed for commuters in urban environments. It is an alternative to…
Well for many people, including me and my family, it’s an alternative to a second car. How much would it cost us to buy a second car? How much would it cost to maintain a second car? How much would it cost to insure a second car? How much would it cost to fuel the second car? When we added up all of these costs we found that the second car would cost hundreds a month for a vehicle that would be used infrequently. So the alternative cost of paying by the trip was a better value for us.
How does this relate to your business? What is your value proposition? What are the alternatives that your customer is evaluating? Do you know what it will cost your customers to not make a purchase decision?