Benefits minus costs: what the value formula misses

On paper, value is simple arithmetic. The buyer receives this much, gives up that much, and the difference is their gain. The calculation closes, the terms look reasonable, and then the decision to come back or to go elsewhere is made on something that was never in the calculation. If that happens often enough, the conclusion is unavoidable: the equation has a term that nobody wrote down.

For a company selling into Russia from abroad this missing term is usually larger than at home, and the search for it goes into price, terms and the competitor’s discount. The loss happened in the other half of the equation.

What the classic formula counts

The value formula reads as benefits minus costs: what a person gets, minus what getting it cost them. Its strength is comparability. It reduces an offer to a single number, lets you set two options side by side, and explains why, at equal results, the one asking for less tends to win.

Its weakness lives in the same place. Only what can be presented as an invoice line enters the formula: price, delivery time, volume, warranty. Everything a person spends beyond money and time stays outside the calculation, even though it is spent from the same limited reserve.

A Western marketing team usually has this formula built into its tooling. Comparison tables, feature grids, pricing pages designed for Google landing-page conventions, all of it is optimised for the first half of the equation. When that offer then underperforms in Russia, the explanation that gets reached for first is that the market is price-driven, or that local buyers prefer local brands. Both can be true and both are often beside the point.

The second half of the equation

Value is formed by two things, and only one of them is the rational balance of gains and costs. The other is how easily the interaction itself proceeds: with the product, with the advertisement, with the page that explains the terms. The less effort perception and use demand, the stronger the sense of gain, and this holds with the terms of the deal completely unchanged.

That shifts the central questions from calculation to sensation. How do you make the information easy to take in. How do you arrange things so that the person feels better during the interaction itself, rather than only after it has delivered its result. This is a different question from “what does it cost and what do I get for it.” It is about the quality of the route, where the formula only ever asked about the destination.

A buyer in Russia reading a foreign company’s offer walks a longer route than a buyer at home reading it in the original language. The copy was translated, so every sentence carries a small extra cost of decoding. The prices may sit in a foreign currency, so the buyer converts in their head. The page structure follows the habits of another market, so the buyer searches for the thing they wanted to know first. None of this appears in the terms. All of it is spent.

Why effort never makes it into the count

Money is registered consciously. Effort is not. A buyer does not invoice themselves for the nerves spent, does not count the minutes that went into working out what the seller wanted from them, and does not add those minutes to the price. But the expense still took place, and it is filed as part of the overall impression.

From here comes a pattern that looks illogical from the outside. A person explains their choice through numbers and made it on a term that no number reflects. The formally better offer loses, and the seller looks for the cause in the price, when the loss happened in the other half of the equation.

This is also why post-purchase surveys mislead foreign companies in Russia so reliably. Ask a buyer why they chose the local supplier and they will name something countable: it was cheaper, it was faster, it had a longer warranty. They are reporting the half of the equation they can see. If you then cut your price to match, you have spent margin on a problem that was never about price.

For anyone building communication the conclusion is direct. The contest is fought on two fronts at once: to offer good terms, and to make the path to understanding those terms easy. A complicated message about an excellent offer regularly loses to a simple message about an average one. That outcome is the second half of the equation doing its work.

Where the Russian route adds effort

The source text describes the mechanism in general terms. What follows is the practical reading of it for a company selling into Russia, and it should be taken as interpretation rather than as research findings.

The language layer. Translated copy reads as translated. Russian buyers notice it in the first paragraph, and from that moment on they read more carefully, checking whether the words mean what they appear to mean. Careful reading is effort. Copy written in Russian from the start, by someone who knows what the buyer will ask, lets the buyer read at normal speed and spend their attention on the offer instead of on the sentence.

The applicability layer. Before a Russian buyer compares your terms with anyone’s, they have to establish that the offer applies to them at all. Can they pay from a Russian account, in rubles, by a method they actually use. Will the goods or service physically arrive, and through whom. Who will answer if something breaks, and in what language. A local competitor settles all of this in the headline. A foreign site frequently leaves the buyer to work it out, and that investigation is the single largest effort cost on the route. The buyer who gives up at this step never reaches the comparison where your better terms would have won.

The contact layer. A large share of buying conversations in Russia happens in messengers, and a Russian buyer who wants to ask one question expects to ask it in Telegram or WhatsApp and get an answer within the hour. A form with six fields and a promise to respond within two business days is, in effort terms, expensive. It also signals that the seller is far away, which raises the perceived cost of everything that follows.

The search layer. The route often begins in Yandex rather than Google, and the two render an offer differently. What a buyer sees in a Yandex ad, the sitelinks, the quick links, the way the page is previewed, decides how much work they expect before they have clicked. A campaign ported from a Google account with the same headlines carries over the effort structure of another market. This is one reason I treat Yandex Ads and the landing page behind them as a single object: the effort the buyer spends is spread across both, and a cheap click that lands on a hard page is a loss paid for twice.

Counting what the buyer will not count for you

The buyer will not invoice you for effort, so you have to measure it yourself. Metrika and GA4 record the result of effort, the drop-off, and say nothing about where it was spent.

The honest way to find the missing term is to watch the route. Session recordings of Russian visitors show where the cursor hesitates, which blocks are scrolled past and returned to, and at which question the buyer leaves to open another tab. Interviews with buyers who chose a competitor rarely name the effort directly, but asked to walk through what they did, they describe it: “I could not tell whether you ship to my city, so I wrote to the other company instead.” That sentence is the second half of the equation spoken aloud. Our customer research work for foreign companies starts here, with the route rather than the price list, because this is where the undocumented term lives.

Then the test that the formula cannot run on its own: take two offers your buyer sees side by side, yours and a local competitor’s, equal or nearly equal in terms. Count the steps each requires before the buyer knows what they get, what they pay, how it arrives and who to call. The difference in steps is the difference in value, and the market will have already priced it in.

What to do if you sell into Russia from abroad

A short route, in the order that matters.

1. Separate the two halves of the equation in your own reporting. When a deal is lost, record two reasons, not one: what the buyer said about terms, and what the route looked like at the point they left. A loss filed under “price” with no second entry is a loss you have not understood.
2. Settle applicability before anything else. Payment from Russia, delivery into Russia, support in Russian, the legal entity that signs. Put the answers where the buyer looks first. Every question left open here is effort you are charging silently.
3. Write the Russian page, do not translate the English one. Keep the facts. Change the order and the phrasing to what a Russian buyer asks first. Price in rubles, or with rubles shown.
4. Open a messenger channel and staff it. A buyer who can ask one question in Telegram and get an answer from a person has spent almost nothing. The same buyer facing a form has spent a lot.
5. Audit the route by profile, not on average. Different buyers trip on different steps. A procurement officer and a founder read the same page with different effort budgets. If your Russian segment has a dominant profile, build the route for that profile first.
6. Only then touch the price. If the effort half is in order and the deal still loses, the terms are the problem. If the effort half is not in order, a discount buys you nothing you can keep.

The formula benefits minus costs is not wrong. It is incomplete. To the question “what will the buyer get and what will they give for it” a second question has to be added: how hard will the path to that result be for them. Two offers equal on the first half are not equal in value, and the decision is made on the difference that appears in no spreadsheet. For a company entering Russia, that difference is where most of the lost deals went.

Frequently asked questions

Sources

• Russian version of this article on belokrylovo.ru: Чего не хватает формуле ценности «доходы минус расходы»