What would happen if we changed the conversation from cost/price to value?

Many of my former colleagues are feeling tremendous pressure from their clients (both internal and external to their companies) to reduce their costs/prices during this difficult economic climate.  In its most problematic form, this conversation comes down to an issue of hourly rates or annual salaries, in comparison to some other competitors.

My view is that this is the wrong discussion.  Yes, clients need to trim expenditures wherever possible.  And this is forcing service providers (both internal and external) to face up to the issue of value.  Can the case for value be made so compellingly that the best course for the buyer is to not reduce expenditures?  Can the price or cost be reduced but in a way that a (tolerable) reduction in value is clearly evident?

If no good answers can be found to these questions, the service provider will not survive in this economic climate.  Conversely, those who do, on the basis of strong value propositions, will emerge from this period in a position to win big.