What Are You Willing to Pay For: The Fundamentals

You've all heard about the 4P's of marketing (product, place, price, and promotion). Today, some marketing gurus talk about the 5 Ps of marketing... the additional "P" is for people of some derivation thereof.

Regardless of what textbooks pronounce as marketing basics, I'm here to say that it all comes down to Value. The value of your product, the value of the user experience, the value that consumers derive from consuming your product or service.

Another way to think about value is, "What are you willing to pay for?". I was recently reminded of this on a recent trip to the airport. I have a number of options available to me. Each of these options had certain costs associated with them both tangible and intangible. For example, long term parking costs less per day but has a number of intangible costs to be considered such as taking multiple forms of transportation to reach the terminal, the extra time it would take to catch my flight, and the concern of getting to my car very late at night after my return flight.

When comparing options to say short-term parking or valet parking, the same analysis applies at either a subconscious or conscious level. You pay more cash for these options, but with that additional value comes other benefits that you may weigh more importantly in your mind. Even if the cost is slightly more but you place a higher value on time, safety, or some other factor, you might be willing to pay the higher price.

Have you thought about your products and service and what your customers might be willing to pay for? More personalized service, faster delivery, or some type of insurance? You need to consider what would be relevant for your product or service. You may also consider asking your customer and prospects... what would you be willing to pay for? The answers may surprise you.