PRICE VS. VALUE: Don’t Let the Ai Hype Train Fool You

Aug 28, 2021 | AI and Big Data, Marketing

“Price is what you pay, value is what you get” – Warren Buffet
It’s as simple as Buffet proclaims, or is it?
Value today has been distorted. It has lost near, to all of its meaning, and has become synonymous with price. Despite the simple definition on google, not everyone understands what value is. Buffet is an example of a person who truly understands the meaning of value. His decades of experience in the stock market have shown him that a company’s price does not necessarily reflect its worth. His ability to find undervalued aka underpriced stocks has allowed him to become the richest and most well-respected investors of all time. Although one could argue that it is easier to deal with value in financial terms, it has application to everyday life, yet people erroneously ignore it: they overpay for products or services that don’t add value to their lives of their companies.

A clear example of people not understanding value is highlighted in a study conducted by Antonio Rangel, an associate professor of economics at Caltech. He and his colleagues raised the question, “Do More Expensive Wines Taste Better?”. When you take a sip of Cabernet, what are you tasting? The grape? The tannins? The oak barrel? Or the price? Of course, we say that our opinions wouldn’t be changed by the price tag, but Rangel concluded that is indeed what happens. His team found that changes in the stated price of a sampled wine influenced not only how good volunteers thought it tasted, but the activity of a brain region that is involved in our experience of pleasure.

So what does this mean? It shows that there is a price-value bias. As humans, we suffer from a long list of mental shortcuts that at one point in time served us well but now lead to faulty patterns of thinking. In this particular case, it shows us that we have a hard time understanding what value really is. We sometimes expect that the more expensive product or service will fit our needs better when this is not the case.

“There is no truth only perception” — Gustave Flaubert

Value is perception. Those who thought the more expensive wines tasted better still had a wine that tasted better (in their minds). So where is the line between placebo and value? Should we be content with overpaying for something if it improves our satisfaction with it? It’s very blurry. Marketers and salesmen with lesser products will always try and hide it. This, unfortunately, leads a lot of people into getting swindled overpaying for products that don’t provide an adequate level of value.

This reigns especially true in burgeoning industries like artificial intelligence. The noise from the hype train sometimes drowns out the deceit from inferior companies with good sales people.

Keyword vs Contextual Analysis 

As a company that utilizes artificial intelligence in our business solutions, Semeon faces this problem every day. There are two ways currently to decipher the online text. One utilizes machine learning and provides actual insights into the wealth of text online. This is contextual analysis. The other way is searching for positive and negative keywords and adding them up. The majority of our competitors will try and convince you that keyword analysis is the same as contextual, but this could not be more wrong. This is where having a keen sense of value outweighs listening to a sales person.

So what is the difference exactly? Contextual analysis and machine learning truly understand the meaning of your consumer’s interactions, opinions, and comparisons. Most analytics companies’ attempt to interpret conversations based largely on frequency driven metrics. As a result, we often see that interpreting meaning is based on the number of times any given word is mentioned in online posts being analyzed. This misinterpretation can lead to a misunderstanding of customer sentiment and cause a multitude of problems.


If I want you to take away one thing from this article, it is that our perception of price and value nowadays is skewed. How we perceive value is not rational decision anymore. Don’t let the snake oil salesman to get the best of you, think before you buy, and do not get misled by price. Over here at Semeon, we build solutions that benefit the customer and allow for measurable returns. We provide actionable insight on your data such as a customers intent to purchase so you can increase customer loyalty and conversions.

Check out the link below to learn more about our platform. Or give us a call at 1800-630-6000.

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