I’m going to share a secret with you today. There’s no such thing as value. At least not in the fixed sense. In fact, value is as malleable as clay.
You, as a seller or as the proponent of any deal, can’t set value for a buyer or deal partner. Value to that third-party is set by him, her, or it. Only if they think that they are getting value from the deal — something worth more to them than the worth of what they are giving up — will they close the deal.
Of course, value plays a role in your decision to close the deal as well. Your value determination is based on the worth of what you’re giving up measured against the worth of what you’re getting.
And, magically perhaps, “worth” and therefore “value” are subjective concepts.
Even more magically, because those concepts are subjective, they can be influenced. Although you can’t set the value for your opposite, you can heavily influence how your opposite perceives value.
I often refer to this as framing: The creation of a situation, a perception, or a background in which the negotiation takes place or in which we want to put the mind of our contracting opposite. Change the frame, change the value.
Here’s an example right off the shelf.
Say you suffer from migraine headaches. When you need relief you need it fast, so you decide to stock up on pain reliever from Amazon.com. You see two different packages of Excedrin: Excedrin Extra Strength and Excedrin Migraine. Here are images of the packaging from the excedrine.com website:
Which do you choose? If you’re like most people, you’ll choose the product made specifically for migraines because, after all, that’s what splits your head in two. You’re willing to pay the extra $4.49 in Amazon’s price ($15.15) over that for regular Excedrin Extra Strength ($10.66) for 200 capsules, as revealed by a search of the site I just made while writing this. After all, it’s migraine medicine, not just regular old headache or flu or stubbed toe medicine.
The only problem, at least for you? The ingredients are exactly the same:
Acetaminophen 250 mg
Aspirin 250 mg – Non-Steroidal Anti-Inflammatory Drug (NSAID)
Caffeine 65 mg
The migraine frame shifts the value determination by 142%!
Yeah, crazy like a fox.