Price is something that you can measure in a specific currency and even convert to any currency you want. But what is the value that people in business today talk about and I would argue that most don’t even fully understand?

We’re talking about value in the context of what you offer as a product or service to your potential customers. It’s called the value proposition. When I ask people how to figure out what the customer value is in their offering, what they most often tell me is that it’s subjective. It’s not logical, it’s not rational, it’s not measurable, like price. But subjectivity is simply the quality of value. What is its essence?

It’s PERCEPTION. Value is the overall experience your customer has with your business, not just the product or service itself, and it’s a matter of perception, which is why it’s subjective. That’s why those feedback surveys that ask you stupid questions like “why did you give us 5 stars” are so annoying. And if we break down the psychological category of “perception” into components, what we can find there is the following:

1. Sensory perception – or more commonly, our senses provide information to our brain, which prioritizes certain stimuli over others (in short: what attracts attention, what is ignored). So the first step in the process of interacting with your potential customer is what kind of stimulus, which senses you use to attract attention to your business proposition. For example, this could be the packaging, the design, the interface, the environment in which the product is offered, or even that picture of a nearly naked beautiful woman in your advertisement – all of these can be triggers that attract attention and influence the customer’s perception of your business, even before the functionality you provide is evaluated.
2. Cognitive biases. The first piece of information (for example, the price, but it could also be that picture of a beautiful girl) sets a reference point. Then people already have some expectation and notice something that confirms their expectations (it can also be negative here: “oh, these are scammers, they are not selling girls, but the necklace she is wearing”). And then we notice (of course again unconsciously) the correspondence and fairness – the perceived exaggeration or sincerity of the message and the way it is conveyed contribute to the overall perception.
3. Then we have this component of emotional coloring, because science has long proven that emotion dominates rational evaluation in the purchase process (Daniel Kahneman received the Nobel Prize in 2002 for this). So the potential customer’s positive emotions towards a brand or product enhance the perceived value, and negative feelings reduce it. And here’s the trick: even the prospect’s current emotional state influences their perception – if they’re angry, for example, they might perceive your attempt to get their attention as too intrusive, and that’s their first impression of your business… Sorry, but you’re screwed 🙂
4. Previous experiences and expectations are the next factor influencing the overall perception of the value of your offering, and these are the prospects’ thoughts that you can’t control: past interactions, cultural context, and personal standards shape how prospects interpret current experiences. So, based on this, even identical products are perceived differently based on the prospects’ expectations, not yours.
5. Last but not least: we humans unconsciously attach narrative or symbolic value to everything. A product is not just functional; it represents status, identity, or reliability.

So, next time you start thinking about what to sell and are trying to figure out where the value is for your potential customers in your business proposition… Well, think again 😉