A Theory of Value

Note sure if this applies to exactly what you are saying, but it's interesting nonetheless…

FROM: http://blog.mises.org/2622/a-tick-a-tooth-subje…

…The following mutually beneficial exchange takes place in Tom Sawyer, and the author concludes with a nugget of wisdom that seems to have been lost on intellectuals for a century or so:

“Say — what’s that?” [Tom asks Huckleberry Finn]

“Nothing but a tick.” “Where’d you get him?”

“Out in the woods.”

“What’ll you take for him?”

“I don’t know. I don’t want to sell him.”

“All right. It’s a mighty small tick, anyway.”

“Oh, anybody can run a tick down that don’t belong to them. I’m satisfied with it. It’s a good enough tick for me.”

“Sho, there’s ticks a plenty. I could have a thousand of ‘em if I wanted to.”

“Well, why don’t you? Becuz you know mighty well you can’t. This is a pretty early tick, I reckon. It’s the first one I’ve seen this year.”

“Say, Huck — I’ll give you my tooth for him.”

“Less see it.”

Tom got out a bit of paper and carefully unrolled it. Huckleberry viewed it wistfully. The temptation was very strong. At last he said:

“Is it genuwyne?”

Tom lifted his lip and showed the vacancy.

“Well, all right,” said Huckleberry, “it’s a trade.”

Tom enclosed the tick in the percussion-cap box that had lately been the pinchbug’s prison, and the boys separated, each feeling wealthier than before.

Ryan,

I heard Roy Williams describe value (used as an adjective) as the relationship between what the customer feels something is worth and what they pay (i.e. “That is a good value” or “bad value.”). Whether something is a good value or a poor or bad value is completely in the mind of the purchaser.

And I think this is where your point about advertising fits. Good advertising (or selling) helps the customer to change their viewpoint about something so that it is perceived (i.e. becomes) as a good value and worth the money asked for.

And I think that is really the point of the post of Perry Marshall's that you link to: those in humanitarian work / worthwhile non-profit work assume (often because they can see it) that anyone who reads their brochure realizes the value of what they do. The problem is, unless that value is described to them, the reader of that brochure as no way to understand the relationship between the money they give and the value provided by the humanitarian organization.

Funny, a lot of businesses seem to have the same problem….

Great post, Ryan.

- John

From my own experience in business, the phrase “value is when both sides feel they got the best of the transaction,” sums it up. If I work for 1 hour to earn $10, I valued my time less than or equal to the money I received. The employer sees it the opposite way. When I buy something, I value what I buy, more highly than what I paid. Regardless of what the seller paid for it, or it cost to create, we each feel we have received full value.
Advertising, and Marketing are processes for finding those who need/want the product or service, and telling them about it. This is a necessary part of the equation because rarely are the two in close physical proximity. Granted, with the Internet the world is at our door, but it's a pretty big doorstep. :-)
We need a guide of some sort to help us find what we need/want. That guide, if done properly, helps us decide if the value is there, before we consider buying. Once we have decided that the value is probably there, and we make the decision to consider buying, we are ready to be “sold.”