What Is The Difference Between Price, Cost, And Value

As a web copywriter or any kind of internet marketer, you need to be aware of the difference between price, cost, and value, or else you will never quite understand buyer psychology and you will not be able to fully relate to your prospects. Price is the amount someone pays for your product, the cost is the actual lifetime payment into the product, and the value is how much the product pays back.
I will give you an example of price, cost, and value. I recently bought a house with a front yard and a back yard, which means it needs to be mowed. I could have done the same thing most of my neighbors do and pay $25 per week to a landscaping service to mow the lawn every Friday morning, and I would not have to worry about it. Instead, I bought a cordless electric lawnmower for $427 including shipping so I could mow the lawn myself. That $427 was the price I paid for that lawnmower.
Next, let’s look at the cost of that lawnmower. I have to plug the lawnmower in once per week to recharge it, which is only about 9 cents a week added to my electricity bill. If I had purchased a gas lawnmower, I would need to factor oil and about $24 per year worth of gasoline, plus trips to the gas station because gas only stores for 30 days. The blades of the mower do not need to be replaced for 3 years.
The only cost of that lawnmower is the mowing time. My day job pays $20 per hour, but since I mow on weekends when I would be doing nothing, I only value that time at $10 per hour.
This relies on the lawnmower not breaking. If the lawnmower broke after one year, the real cost would be $8.20 per week. So even if I mowed the lawn myself and the mower broke every year, my cost would be $18.20 per week which is still 25% cheaper than paying someone else to do the job. Realistically, the battery lasts about 10 years, so my cost is about $10.91 per week.
Finally, you have the value. Value is what you get out of it. For me, that is a clean cut lawn, which I cannot really measure, because it’s a city law that you cannot let your grass grow too long. I would consider the value for a nice lawn to be $25 per week. Add onto the fact that the process is relaxing and that exercise is healthy for me. Many people pay $30 per month just to go to a gym to work out. Since the value of that product is $25 per week, I am technically turning $10.91 into $25 week after week.
That is the way your prospects should view your product, and that is the way you should sell to them… in terms of price, cost, and value, not just the price.

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