Value vs Cost

We’ve heard and seen people using the terms Value and Cost interchangeably. So what’s the difference?

In a literal sense, this goes back to our school days. So let's see who remembers and was actually paying attention in those long english classes! These words are both nouns and verbs.

Sometimes Value can be directly attributed to a dollar amount. For example, your retirement plan may be currently Valued at a specific amount. That’s the use as a verb.

However, when working with clients, partners, and customers, we like to focus on the noun. In this case Value is something of importance, worth, and usefulness.

As we know Cost when used as a verb is the amount paid or spent to buy or obtain something. For example Apple Air Pods Cost $159. As a noun, it can represent a result, or outcome.

Sometimes people look to save money in the short term, and tend to focus on getting the cheapest deal. They believe focusing on Cost is the most effective strategy, neglecting to analyze the overall Value provided.

As buyers, we often look at the least expensive option or best deal which seemingly makes sense. However, if the lowest price is the only criteria used when purchasing, we may be overlooking the soft Costs associated with cheaper items. In conjunction with prioritizing price, Value must be considered during purchasing processes to optimize the outcome! For example, you buy a cheap car thinking it’s a great bargain, but that low price doesn’t necessarily mean it will have good Value. Ultimately, depreciation, and Costs for maintenance and repairs as a result of mechanical failures and time spent inoperable, diminish the Value. Had the the soft Costs of auto repair been fully considered, perhaps it would have been more logical to purchase the more expensive, yet more reliable car initially. The Value is realized in less out of pocket expenses and the knowingness of dependability.

Similarly, when purchasing products for amusement and entertainment markets the soft Cost of cheap must be recognized. Those items do not always work as they should or were originally intended, and can break with ease. You end up with a frustrated customer who was expecting Value from their earned prize. It’s important to have a variety of price points and prize options, but don’t neglect the need for those high Value products. Rather than purchasing just low Cost items, look for opportunities to integrate higher-quality items your customers will play for, relate to, and genuinely enjoy because of the Value offered. Quality products will last, and probably will have your customers playing longer, walking away happy with what they have won, and excited to come back to play for more.

The key advice to remember when trying to avoid the purchasing of cheap products is to realize that you tend to get what you pay for! As the saying goes, “buy cheap, buy twice.”

Buying a cheap product will usually need replacement, hence the soft Cost of cheap!

Don’t let Cost diminish Value!