When Price Matters…And When It Doesn’t
As a service provider, I did lead on price for a number of years. Back in the days when much of my business was resume writing, I used a simple half-inch in-column ad in the Yellow Pages (remember them?) with the slogan “Affordable professional resumes while you wait.” The year they changed it without permission to “Affordable professional resumes while U wait,” I successfully argued that proper grammar was a key selling point in my line of work and they killed it—and got the cost of the whole year’s ad refunded. I turned out to be wrong; that ad brought me plenty of clients. But I personally would not patronize a writing service whose face to the world was ungrammatical.
Those ads ran in the 1980s and 1990s, and resume writing is only a tiny fraction of my current business. These days, I stress value, not price–for all the services I offer. Some are still quite inexpensive, like writing a press release or book cover—or, for that matter, the occasional resume I still write. Others, including strategic consulting on green and social change profitability as well as book publishing consulting, can be fairly pricy.
I would have moved away from marketing on low price anyway, as my business matured. But if I hadn’t, my business would have dried up. The market is very different now. Nobody is a prisoner of their own geography any more. I can’t compete on price with some clown on a bottom-feeding service bidding site who throws an article into a word-blender and spits out crap for $5 a shot. But I sure can compete on value and quality.
As a consumer, I’m price-sensitive on some items, but quality will trump price, and so will politics. Yesterday, I spent $40 or $50 at the farmers market. I could have bought the (theoretically) same items at a supermarket for half the price, but not the organic/local/fresh choices I purchased. But I also stopped at the local independent discount store and picked up some just-past-date polenta for a buck. I cooked it last night and it was fine. I have a less gourmet one in my fridge that I paid $3 for at a different store and it doesn’t expire until November, which means the one I ate tonight was probably packed last summer. But that’s OK, it was fine.
I learned all the way back in the 1980s that price and value were not necessarily the same. After a couple of bad experiences with cheap electronics, I started buying better quality components for my stereo, better telephones, and so forth—and being much happier with my purchases. I learned that I could get a good deal through a remainder catalog, and that a $100 item with an original list price of $300 was generally going to be a much better value than a $75 item that had never sold for more than $100. And when I bought my first computer, I went with the expensive but easy-to-use Macintosh and was very happy I did.
I will shop at that local discount store, but I won’t shop at that very famous low-price big box store beginning with a W. While I recognize that they are among the best in the industry on sustainability (something very important to me), I’m also painfully aware of how much I dislike their store siting and closing policies, their community relations, labor practices, supplier practices, and a bunch of other stuff. Plus, I’ve heard that the quality is often less than stellar. I give them kudos in my speeches for, among other things, developing a massive market for organic foods among people who have never been inside a Whole Foods. But I personally choose not to shop there.
But I’m perfectly happy to drive inexpensive, functional cars. Right now, we have a 2004 Mazda, bought new for $17K, and a 2005 Toyota Corolla, bought at six years old but with only 26,000 miles on it, for $10K. I expect both to last several more years. When we bought the Corolla, one of our other options was a used Prius with 99,000 miles, for $12K. The Corolla seemed like a MUCH better deal. It wasn’t the lower price so much as having only 1/4 as many miles.
In short, as a consumer, I’ll definitely factor in price, but it won’t be the only factor. How about you? As a business owner and as a consumer, how does price factor into your decisions.
