It’s not often I agree with a marketer but on this occasion, Seth Godin provides us with a masterclass in the difference between cost and value in the context of sunk costs:
When making a choice between two options, only consider what’s going to happen in the future, not which investments you’ve made in the past. The past investments are over, lost, gone forever. They are irrelevant to the future.
I can hear the brains trust in the back going: ‘Hmmm…that depends.’ but he’s got a valid point. From the most recent past: I avoided going to Orlando for SAPPHIRE, opting instead to be one of the 8,000 virtual participants. Why would I do that?
- A trip of that kind is a good 4-5 days out of my life.
- I already had a good idea what they would be talking about and had been briefed on issues that matter to me. What more might I have learned?
- I also need to be in London this week and didn’t fancy the idea of wrestling with jetlag.
- Finally, I could get much of what I need from live streams and trusted colleagues who would be at the event.
Ergo: the 4-5 days cost which I would otherwise have sunk were unlikely to be offset by the value I would receive – including past investments. I could still cover the event, albeit from the ‘cheap seats.’ I also got a bonus: an unexpected opportunity to make a meeting with someone who lives in the US who happens to be in town at the same time.
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