Struggle with Price? Understanding Price vs Value

Do you ever feel like you have no words... or you don't have the ability to speak when you start talking about price? 

It's anxiety provoking, and you're not sure how to deal with it.

Well, the good news is you can improve.

the bad news is, not without growing pains. What do I mean by this?

The only way you will get more comfortable talking about price over time... is to talk about price more. That's it.

However, to assist you along the way - it's important for you to understand this...

The difference between price and value. 

If you want to watch a video version of this - click the link below.

 Let's start with the easy side - price. 

Price is just what you pay... that's it. It could be $50, $60, $70, $100000. 

The question is... why are there people who would rather pay $50 or $1500 for a similar service?

For example, if both chiros offer a 30 minute consult - but one is $50 and the other is $100, why would someone choose to pay $50 extra for a $100 appointment and not for the $50?

This is why understanding price vs value becomes important.

Because what people pay for is what they value. Not necessarily what it is priced. 

To break this concept down even further, let's explore the mindset of someone like Warren Buffet, who is a famous investor.

Buffet's motto in investing is pretty simple - invest in something that will grow in value and hold it. That's it. Of course I'm being simplistic, however the principle remains the same.

Buffet pays for a stock that he believes has huge growing potential, and that's it. His main value driver is return on investment. So for someone like Buffet, as long as you have a company that he believes will grow, and it's priced fairly for him, he'll buy it with the full knowing that it'll rise. That's all.

Now I like this example because there's a very obvious mathematical equation. Put $1 in, hopefully get $10 back when you decide to sell. 

But when we apply this to health, value becomes a little more confusing because there's nothing monetary directly tied to their dollar. You could make indirect arguments like, you'll think better, perform under pressure, be healthier... but unless that's something the patient values, it might be a miss. 

Extending on our chiro example, if a patient comes to see you for help - what are the value drivers that matter to them? Ie. what exact value has driven them to book in to see you?

Think about this very carefully. Because I can tell you what it ISN'T.

• They are not there to be needled (unless they love the sensation of being needled)
• They are not there to be deep tissue massaged (unless they love the pain)
• They are not there for the 'exercises' (because most exercises are painful)
• They are not there for adjustments (even though they might love the feeling)

All the modalities I just listed above are tools to help them get to a certain place. And THAT is what they value. 

An athlete who is injured 4 weeks away from a major competition comes to see you because they value their performance in four weeks time. And you need to find out how you can be of value to that. This is why an athlete would rather pay $50-60 extra to see a sports chiro who specialises in soccer... than a general chiro. 

In another example, if you have a labourer whose hurt his back - they don't come to you for the modalities. They come to you because they want to get back to work (because this is linked to their ability to provide). What they value is how you can help them speed up the healing process.

In the final example, as a coach myself, I don't derive any value from another coach telling me how to use gym equipment. I never have, because my level of expertise already exceeds most ordinary coaches. However, when I DO work with coaches, I make it very clear that I'm interested in the way someone thinks, and the insights they have.

This is why I will happily pay $300 for a coaching call with someone who has knowledge I don't for business, but I refuse to even do a 'free session' with a strength coach. Because I don't care about strength training for one. Two, I already have most of the knowledge I'm happy with. And three, 'free' in price still 'pays' in time. I'd rather keep an hour walking in the sun. 

Now I want to extend value a bit further to really drive this point home. Value is also affected by time-scale. Some people value a good time with alcohol - this is short term. Some people who value long-term brain health might refuse to drink alcohol entirely. 

Similarly, most of the work we do in health doesn't appear attractive in the short term. But in the long-term, our work has infinite, compounding effects.

For example, teaching someone a 3-day gym program as a task itself is probably not THAT enjoyable for someone who is doing it for the sake of 'health.' In a year's time, if they keep progressing with a 3-day gym program, they'll see the value of more because their results will compound.

In a decade, if they  continue doing the 3-day program... they value the program infinitely more than when they FIRST started their program.

Now fast forward thirty years, when everyone around them is unfit, suffering from knee problems and weight problems... their 3-day program is probably the best investment they made in their life. 

It might seem like an exaggeration but it's really not - because value transcends time whereas price does not. As health professionals, just remember that your service, whether it is rehab, life, fitness and/or psychology... if you truly set up your patients for long term success - the value that you provide will influence them across time. 

Until next time,
Phil