Defining “value” is a little like defining “art” – it’s subjective. But I needed to give it a shot:
Let’s start with what it’s not – it’s not simply about identifying what results you deliver and calculating a price for it. That’s a popular “shortcut” to something approximating value, but it has two big flaws. Both of them are caused by the differences in perspective between you and the client.
Firstly, know so much more about the subject than the client that you see all sorts of details the client doesn’t. To illustrate that difference, imagine a person standing on a random Croatian beach. If that’s a biologist, she would see a dynamic system shaped by geological history and ecological patterns teeming with life. She would then be able to talk for hours about the beach’s past, present, and future. If it was me, I would see a “nice view”.
Secondly, tangible results don’t include peace of mind, new options, ease of integration, and all sorts of other things.
The first I call “phantom value”, which you can see but the client cannot. The second is intangible benefits the client would certainly miss if they were gone.
Remember, no one wants to pay for value that they can’t see.
That’s why I talk about value as a sum of “value drivers”. They are pieces of information about your delivery in a project that collectively contribute to a client’s willingness to pay.