Price, cost and value
Three words treated as if they were the same. Price is what the customer pays; cost is what it takes you to produce; value is the only one the customer cares about.
Price, cost and value get used interchangeably in most sales conversations, and the confusion is expensive. Price is what the customer pays you. Cost is what it takes you to produce the offer. Value is the impact the customer’s business receives from it, and it is the only one of the three the customer truly cares about, however much the procurement conversation dwells on the first.
The same chapter separates wants from needs on the same principle: a want is what the customer asks for, a need is what would move their business. A customer who wants a lower price usually needs a lower total cost or a higher return, and the supplier who can show the difference, in the customer’s numbers, has changed the subject. That is the whole of offer ideation in one move.
Set out in full in: Creating Customer Value Propositions with AI (Kogan Page, 2027), chapters 4 and 7.
Related terms
Value equals impact minus total cost of ownership
Value is what remains when you take the whole cost of having the solution from the impact the customer can bank.
Offer ideation
Diverge before you converge. The machine's gift is width; the cull is yours.
The five sources of value
Bottom line, top line, reputation, strategy and organisation, and the end consumer. Everything above the discount, which is transfer, not creation.
See the method run on one real account in three days: the One Page Proposition.