What is the cost of a Toyota Corolla 1.6?
What is the cost of a Mercedes Benz S65 AMG?

Why is there a cost differential? Both are just cars that perform the functional value of mobility. 

What is the cost of an edition of Daily Sun?
What is the cost of a single issue of Wall Street Journal?

Why is there a cost differential? Both are just papers written by people intended to communicate new information to the readers.

Everything has a price and value. For some things, those two variables are closer than others. I have come to admire the business of Discovery. They sell us an intangible benefit – often a future promise of a duty they will perform when the time and conditions arise. Why are the most successful medical aid in South Africa? They have 1,2mln principal members, the largest of all medical schemes in SA and have the third fastest growth rate. So they are big and they are growing.  As a member I can also assure that they are not the cheapest.

The other day, my wife compared them with another scheme and found that they had fewer benefits and were more expensive. Even with this evidences, she couldn’t make the switch. She said that she just cant “trust” the other scheme. I am sure Discovery is not perfect and there are many disgruntled customers out-there but have done an amazing job of building a brand reputation.

I insure with Alexander Forbes. I have been contacted by several other insurers with savings of up to 18% of my monthly premium. The thing is though that I was with the other insurers before I moved to Alexander Forbes. Whilst the premiums were fairly low, the service when one had to claim left much to be desired. Claim forms that went missing, being repeatedly penalised for claiming (which is the reason why you insure in the first place) and then being with increases way above the inflation rate. So the price was low but so too was the value. My current insurers has repaired losses at record time, they implicitly believe me when I claim and don’t sent dodgy assessors that look for reasons why the insurer should honour the claim. Price then doesn’t matter when I consider the value I have for this single piece of mind.

It is a well-known that Apple is amongst the most expensive computing and smartphone brands in the world. They are so expensive in fact that many corporates don’t have the brand on their shopping list. Yet the company continues to make serious inroads into the luxury sector, even hiring the former CEO of Burberry to run the wearable tech business. The truth is that Apple is just a value-brand play. This is why globally, Apple has never had to position itself on the price of the product but rather the value of owing the brand and being part of their brand community.

I just recently had my public speaking office in Joburg broken into. The geniuses took only the desktop and left the keyboards, power cords and mouses. We run a full Apple environment not only for the aesthetics but also to give the team a better working experience. I visited the local Apple store with a cheque book and a ticket to spend. After 2 hours of browsing, testing equipment and making the decision and on “what” and “how much” of each, I did the honourable thing every entrepreneur does, “I asked for a discount”. After 30mins of wrangling, numerous calls to head office and threatening to leave the store, they gave me a grand total discount of 2%. Yes. 2%!

I asked the branch manager why they are so stingy with their discounts and he said, we are Apple. Owing the brand is its own reward.

So which are you? A Toyota Corolla or a S65 AMG?

Are you a Daily Sun or Wall Street Journal?

Are you a price play or a value play?

Remember this, price is the conversation people have in the absence of value!

Vusi Thembekwayo
Speaker. Investor. Disruptor.