mardi 19 mai 2015

Price vs Cost?

Has anyone heard this term before?

I am going through Jason Fladlien's 400 words in 7 minutes training course. By the way it's a great course. To get info just google Jason Fladlien.

Anyway back to Price vs Cost and a way to re-frame the client's perspective. Price = the physical price of the product and/or service. Cost = the value of the said product to the client.

Price:

So as I understand this you pay $2,000.00 for the new website with an email collection tool. It doesn't matter what features are in the website but you need to be able to measure the success/failure.

Cost:

Next you track the new website and find that the new website is bringing in on average $500 per month in new sales. The Cost is then measured over the next 3 years, which make the value to the client = $18,000.00.

The price is $2,000.00 the value to the client is $18,000.00. To re-frame the price vs cost it is 1) price is $55.55 per month and 2) the cost or client value is $500.00 per month based upon the website measuring tools.

Instead of pitching your price maybe you should pitch the way you measure the true value. You answer the: "what's in it for the client?" Then add "what if scenarios?" What if you made $100.00, $500.00 or $1,000.00 per month with the new website?

Any thoughts, RR


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