PRICE, COST, AND VALUE

April 26, 2010 on 1:47 am | In Uncategorized | 1 Comment

You see a sweater.  You look at the price.  It’s less than you expected, or at least you can afford it.  So, you buy it.  We all use price as a factor in our decision-making.  We use it in our career decision-making as well:  should I hire a career coach (how much does she charge); should I join that professional organization (how much is the membership); etc.  Price is an important factor because it is one way to quantify what something is worth.  However, we also need to consider the cost and the value of our choices, and these may not be the same as the price.

That sweater may be priced at $100, but it costs you however many hours it takes to earn that $100.  It also costs you whatever you had to forego to buy it.  That sweater may have sentimental value (if it reminds you of a favorite relative), cosmetic value (if it adds to your wardrobe), or career value (if you’re an actor and need it for an audition).  A career coach may charge a price of $100 per session.  The costs include the hours it takes to earn $100 plus the hours you spend before, during and after the session.  The value is in the motivation you get, the direction and advice you receive, and any savings you get from not spinning your wheels on your own. 

If you think you want something (to buy, to do), think:

Do I have the money to pay the price?

Do I have the time to bear the cost?  What am I foregoing to buy/ do this?

What value am I getting from this?  What am I giving up?

When you make a decision, think price, cost and value.  Ideally, the price is affordable, the cost is bearable and the value exceeds the cost.

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  1. […] written before about price, cost and value, and how these are separate and different things, so Porter’s topic is near and dear to me.  […]

    Pingback by Do You Know The True Cost Of Decisions You Make | SixFigureStart® — June 14, 2011 #

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