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Chewing Grass

Value

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Posted (edited)

Amazingly nobody has ever used the word value on this site and as I have just talked to Virgin Media about the subject I thought it was worth a topic about 'value'.

The hard working Indian laydee in the call centre rang to see if I was getting 'value'.

Virgins idea of 'value' is more for more, not more for less or even more for the same.

Confused by this concept I persevered in trying to convince the laydee that value is more for less for a good ten minutes.

Eventually she confessed that her department could not offer anything for less or even more for the same so could not offer me value.

My principles and intellectual superiority therefore remain intact, my 'services' remain the same and so does my bill and therefore my theoretical feeling of 'value' is also.

Edited by Chewing Grass
speeling

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I didn't think we were getting good value. So threatened to leave, They said go on then. So we signed up with someone else at which the retention man rang up and matched the deal we were going to. 

They don't know what good value is. I spent ten minutes berating the poor sod who rang to tell him it wasn't good value for their team to have to ring me after I've told them I'd leave to make me the deal the first person should have offered.

 

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Posted (edited)

Economic activity is all about difference in value. Things end up with people who value that thing higher, like houses. You must be getting value from Virgin or else you wouldn't be paying for it.

Edited by Panther

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'Proper' companies* 'fail' if they don't charge as much as the maximum the customer is willing to pay.

The clever bit is making people think that they're getting away with paying less than the maximum they're willing to pay.  The customer calls this 'value'.

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6 minutes ago, dgul said:

'Proper' companies* 'fail' if they don't charge as much as the maximum the customer is willing to pay.

The clever bit is making people think that they're getting away with paying less than the maximum they're willing to pay.  The customer calls this 'value'.

Exactly. This is why companies like Virgin Media structure their prices in the way they do, effectively allowing any customer to choose the largest amount they wish to pay.  The cost of supplying e.g. 100Mb broadband vs 350Mb is going to be absolutely tiny, however they'll take an extra £120 a year off you for the latter, if you want to give it to them.  The likes of Starbucks do the same thing, but with coffee.  It doesn't cost them 25% more to serve you a large drink rather than a small one.  Companies rely on the fact that there are very few people who want the cheapest of anything.  Some even count on people wanting to pay more for something; Hendrick's gin was a bit of a flop when it was launched, however when the price of it was doubled, sales went through the roof.  People perceived they were getting better value - "this one's really expensive, so it must be good".  Telling someone that something is expensive before they try it is proven to make them genuinely believe it tastes better, hence blind testing.

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I also seem to remember reading that, for some products, there's no difference between the "no-frills" own brand and the "extra special" one apart from the packaging. And, of course, the price charged to the consumer.

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Posted (edited)
23 minutes ago, dgul said:

'Proper' companies* 'fail' if they don't charge as much as the maximum the customer is willing to pay.

The clever bit is making people think that they're getting away with paying less than the maximum they're willing to pay.  The customer calls this 'value'.

In some cases. 

This is pretty sophisticated these days, it's all about customer segmentation and tailoring the offer by segment. 

In Sarah's case she would have been in some kind of 'loyal' segment, so no need to offer her a discount there and then. Only people in this segment will get the follow up call, if you switch every 6 months they'll just let you go.

 

Edited by Roger_Mellie

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Posted (edited)

As a follow up - as I've mentioned before the car companies are great at this. What value is there in a Mini vs. a golf that makes someone pay 5k more for the mini?

Why does someone drive a BMW rather than a Mondeo? or an Audi rather than a Skoda? There's a genuine science to this.

Edited by Roger_Mellie

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Posted (edited)
18 minutes ago, AWW said:

I also seem to remember reading that, for some products, there's no difference between the "no-frills" own brand and the "extra special" one apart from the packaging. And, of course, the price charged to the consumer.

Normally the supermarkets, who order the product from the same supplier demand small changes to the recipe. However for the supplier running two separate manufacturing lines or shutting down to change the process to put say 5% less tomatoes in your Bolognase sauce works out more expensive than just keeping the original line running, so often yes the no-frills will end up identical to the extra special.

I know this because I worked for a food manufacturer who got caught out by Tesco doing something like this.

Edited by gibbon

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Nowadays most people "value" marketing, packaging and customer service, rather than the product itself. Particularly if it's a tangible product, the value is in it being packaged up nicely, and marketed very well. The product itself can be made in China like everything else, and it can even  be rendered useless after a few years, but this doesn't matter because it has been designed in California (TM). Heck, even some of the components can be made by their biggest rival but people don't mind.

But that's how you make a multi-billion dollar company nowadays. Marketing, marketing, marketing.

So I would say - and I think the marketing men would agree - that the real value is in how the product is presented. If you feel you have bought something worthwhile (when in reality you have not) then that's where the value is.

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Posted (edited)
1 hour ago, dgul said:

'Proper' companies* 'fail' if they don't charge as much as the maximum the customer is willing to pay.

The clever bit is making people think that they're getting away with paying less than the maximum they're willing to pay.  The customer calls this 'value'.

And the corporates call it "up-selling":

 

upsell
/ˈʌpsɛl/
verb
gerund or present participle: up-selling
  1. persuade a customer to buy something additional or more expensive.
    "how to upsell without turning off your customer"
Edited by Libspero

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24 minutes ago, spunko said:

So I would say - and I think the marketing men would agree - that the real value is in how the product is presented. If you feel you have bought something worthwhile (when in reality you have not) then that's where the value is.

Value is always in the eye of the beholder.

In a world where mass production is dirt cheap and genuine IP protection limited then the differentiator is often packaging or service related rather than product. Interestingly you rarely see genuine competition on price as price sensitive and non-price sensitive customers usually fall into different segments and therefore have different offers.

 

 

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2 minutes ago, Libspero said:

And the corporates calls it "up-selling":

 

upsell
/ˈʌpsɛl/
verb
gerund or present participle: up-selling
  1. persuade a customer to buy something additional or more expensive.
    "how to upsell without turning off your customer"

Upselling is different. 

Upselling is about selling additional products or a more expensive product than the custome intended to buy. It is based on a value argument but upselling isn't value in and of itself. Like getting a large McDonalds, or a fries with your burger. 

 

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1 minute ago, Roger_Mellie said:

Upselling is different. 

Upselling is about selling additional products or a more expensive product than the custome intended to buy. It is based on a value argument but upselling isn't value in and of itself. Like getting a large McDonalds, or a fries with your burger. 

 

I agree..

But up-selling was what virgin were trying to do to Chewy..   offer him more "value" from a more expensive product.

When what they really meant was selling him a higher cost product with a better margin makes him a better value customer to them :D

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1 minute ago, spunko said:

I believe you have the idiom slightly wrong there. xD

I don't think so, value is whatever YOU perceive it to be. So it works. A man can tell a woman she's beautiful, but she doesn't have to believe it. If you think you're getting value, you're getting value. 

Until you get buyer's remorse. I've never understood what value anyone sees in spunking 25k on a timeshare whilst they're in the middle of a 2 week holiday to Tenerife. Most of them seem to regret it when they get home. 

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3 minutes ago, Libspero said:

I agree..

But up-selling was what virgin were trying to do to Chewy..   offer him more "value" from a more expensive product.

When what they really meant was selling him a higher cost product with a better margin makes him a better value customer to them :D

It was. The outsourced call centre thing is interesting... I bet most people would value UK call centres, to the point where it's a differentiator. If sky could guarantee me a connection to a UK based call centre 24 hours a day I'd switch from Virgin. Which makes me wonder why someone doesn't do it. 

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Posted (edited)
1 hour ago, Roger_Mellie said:

Why does someone drive a BMW rather than a Mondeo?

Because they are RWD, but Minis aren't though.

Edited by MrPin

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1 minute ago, MrPin said:

Because they are RWD, but Minis aren't though.

That isn't the case for new BMWs now sadly MrPin. They have gone AWD as standard a few years ago. Boo!

If there was a 4.0 V8 Mondeo I'd probably want it, though.

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Posted (edited)
3 minutes ago, spunko said:

That isn't the case for new BMWs now sadly MrPin. They have gone AWD as standard a few years ago. Boo!

If there was a 4.0 V8 Mondeo I'd probably want it, though.

Isn't that a Mustang?

If you really self analyse on this and think about what kind of segment you might fall into, you'll almost certainly find that we're all a marketers dream with houses, driveways and garages full of stuff targeted directly at us.

Edited by Roger_Mellie

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2 hours ago, AWW said:

Exactly. This is why companies like Virgin Media structure their prices in the way they do, effectively allowing any customer to choose the largest amount they wish to pay.  The cost of supplying e.g. 100Mb broadband vs 350Mb is going to be absolutely tiny, however they'll take an extra £120 a year off you for the latter, if you want to give it to them.  The likes of Starbucks do the same thing, but with coffee.  It doesn't cost them 25% more to serve you a large drink rather than a small one.  Companies rely on the fact that there are very few people who want the cheapest of anything.  Some even count on people wanting to pay more for something; Hendrick's gin was a bit of a flop when it was launched, however when the price of it was doubled, sales went through the roof.  People perceived they were getting better value - "this one's really expensive, so it must be good".  Telling someone that something is expensive before they try it is proven to make them genuinely believe it tastes better, hence blind testing.

Ive always assumed that a large Starbucks coffee just contains ~30% more foam,, which is about ~5% more coffee.

 

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Posted (edited)
2 hours ago, eight said:

I tell you what isn't value; Sky Movies. No I do not want watch Ant Man vs. The Transformers again! Or even once!!

The age old marketing technique of bundling unrelated things together so that you end up paying for stuff you dont use but your subconscious value calculations still includes those things (well it does if your a fucking moron like the average person).

In Skys case they carefully spread out all the good content among as many different channels as possible.

Edited by goldbug9999

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