All purchase decisions are based on perceived value. Think of value as a scale in the client’s mind with benefits from a service on one side and the cost the client must incur to receive those benefits on the other side. Benefits and costs can be tangible, intangible, functional, emotional, and social.
Wisconsin Lawyer
Vol. 82, No. 5, May 2009
All purchase decisions are based on perceived value. Think of value as a scale in the client’s mind with benefits from a service on one side and the cost the client must incur to receive those benefits on the other side. Benefits and costs can be tangible, intangible, functional, emotional, and social.
- Tangible – Firm A will help my bottom line by sending more referrals my way.
- Intangible – Firm B will lower my risk more; the lawyers just seem smarter.
- Functional – Firm B will take less time, enabling me to close my deal faster and get paid sooner.
- Emotional – I like Firm A’s politics.
- Social – Firm B better supports the United Way, which is my favorite charity for helping our community.
Client perceptions are what matter, not what attorneys perceive as important. You can try to educate clients about the benefits of your services, but ultimately the client’s perceptions become truth in the client’s mind.
When benefits are seen as equivalent, cost (that is, price differences between two firms’ services) drives relative value. As industries mature, once-differentiating benefits become standard parts of every competitor’s offering and out-of-pocket and indirect costs become the only differentiators. The process by which this happens is called commoditization.
Wisconsin Lawyer
