Cheap isn’t about value creation. It’s about the absence of value. It’s true that some segment of customers, regardless of any protestations to the contrary, uses price as their primary decision-making criteria. All things being equal, they’re right to choose price. But all things being unequal, buying on price alone is dangerously short-sighted and foolish.
Less Than What You Paid For
You do get what you pay for. But you also get less than what you pay for when your buy on price alone. You get a lower standard of quality when there isn’t enough profit to deliver craftsmanship. You get a lower standard of care when the price doesn’t allow people to give you their time and attention. You lessen the likelihood that you’ll get the outcomes that you really want, and you get less certainty when it comes to risks.
You get what you pay for . . . and less. You’ve undoubtedly had this experience, haven’t you?
More Than You Paid For
A higher price doesn’t automatically translate to a greater value creation, but much of the time it’s a darn useful heuristic. A higher price is normally the result of greater value creation. Things cost more because they produce a better result, a better experience, a better outcome. It costs more to deliver craftsmanship. It costs more to deliver a greater level of care. It takes more time and energy.
You’ve had this experience too, haven’t you? You’ve been thrilled or delighted with the surprise of buying something that completely exceeded your already high expectations.
Battle Lines Being Drawn
Right now, commercial markets are drawing lines.
There are those who believe that everything is transactional. Their goal is to drive costs out of the business, disintermediate the middle man, and pass those savings off to their clients.
There are others who believe that there are customers and clients who are willing to pay more for something of greater value. Instead of trying to find a way to cut costs from the business, their goals are to make the necessary investments to create greater value.
You get what you pay for. More or less. And so do your clients. What does that mean about who you are and what you sell?