Quality vs price. What is a good value?
I wanted to write about the concept of value for some time. What is a good value? How do price and quality fit into the picture?
It amazes me to see how many people get so excited when they buy something on sale. It is obvious that these people perceive value as the lowest price. But doesn’t price follow quality? Doesn’t a lower price usually mean lower quality? The answer to that question is yes. Lower price usually means lower quality. The cost of a tangible product such as a car is based on the cost of the raw materials, the engineering, the labor and the advertising. All of that costs money. A $3000 car and a $30,000 car are different. One is better quality than the other. Services are the same way. Someone with more knowledge and skill will charge more and someone with less knowledge and skill should charge less. But is one a better value than the other?
It seems to me that the best definition of value is where the amount of quality received is in greater portion than the price paid. In the chart below if you pay a dollar you should receive a dollar worth of quality. The same goes for $2, $3 etc. That represents the line in the middle.
If you pay $2 for something and get $4 of quality then you have a great value. If you pay $3 for something and get only $2 of quality then that is a poor value. The yellow triangles that are above the line are a great value and the ones below the line are a poor value for what was spent.
The best value is where you are getting more quality than you are paying for. Price is only one half of the equation. Don’t get fixated on the price. Many times paying more for something is the best value because you get far more quality for the amount spent than you would buying something less expensive. It is always better to buy the best quality you can afford.
This same common sense approach applies to services as well as products. At Too Hotties Haircuts we strive to give our clients “the best haircut they have ever had” and be the best value in a men’s haircut. If you add up all of what we do in our basic cut, (before and after shampoo with a scalp massage, hot cream neck shave, cut and style) then you see why we are the best value.
Look at how you spend your money. Determine what you get from different businesses for the same service. If one company is offering much more for a little more in dollars that may be the best value if those extras mean something to you.
So don’t become fixated on price. Keep your eye on the big picture. Look at all the features and benefits associated with a product or service and compare that to the competition. More often than not you will find that the best value is not the cheapest price.
“The bitterness of poor quality remains long after the sweetness of a low price is forgotten.”