I can count on one hand the things I remember learning in college. One of them is this formula, which was taught to me by Orville Comer in Marketing 101.
Apparently, this gem of an equation was never taught to 99% of the people I’ve met during my career. Including countless clients, who talk about value as if it’s an attribute of their brand. Value is never an attribute. It's a conclusion. One drawn by the customer, based on their evaluation of the benefit and the effort they perceive. A calculation that happens numerous times a day. This explains why you’ll stand ten people deep to order a Starbucks mocha latte when you wouldn’t wait more than a minute for diner coffee. The benefit is worth the effort. (Effort often includes price, which, in the case of Zappo’s isn’t better than retail. But since the shopping, delivery and return experience is so unbelievably easy, it mediates the price, resulting in a favorable index.)
This formula is foolproof. You can use it for automobiles, frozen dinners and parking spots. If you are honest with what you plug in for benefit and effort, you can increase your value proposition by tweaking either factor. Guaranteed.