17 May 2013
Words Tim Admin

Value for money in a discount mad society

Everyone’s looking for a bargain. People love to brag about the great discount they negotiated or the steal they got on the price of something. Whether it be a low interest rate loan or a cheap handbag, the average Aussie feels good when the price goes their way. Even better if it’s a win over a faceless corporate whose sole purpose is to rip off the little guy. Of course, the other great conversation subject these days is the awful service offered by so many companies. So, the obvious conclusion is that people want great service at a bargain price. Funny that! We find that increasingly our clients demand the highest level of service and expertise at the lowest market price. Ultimately, expectations will meet reality and something has to give. Increasingly consumers simply are not prepared to pay for the service that they demand. The challenge, I believe, is to demonstrate value for money within the service equation. There needs to be a connection made between price premium and benefit, or the consumer will simply chase the lowest price. And as a wise old man once said “Live by price, die by price”. At the core of the value question is perception. Do I believe that the amount I’m paying is appropriate for what I’m receiving? In many cases, particularly in service industries, it’s what happens after the purchase that really counts. The simple little value adds that all contribute to a perception of value for money. It’s also the little things. Access to reliable people. Honest and professional advice. Being there during the good times and when you’re clients need assistance. Knowing your business partners really understand your industry. I’m sure you’ve had clients who drift away over time because of price. It’s always interesting to see them come back once they start to miss those little extras. Again, it’s the same in my job. Yes, we hate to lose clients but every so often we do. It’s almost always on price. Sometimes the experience turns out okay for them. But, more often than not, the feedback is that long after price is forgotten, service (or lack thereof ) remains. And remember, if all else fails, you can reflect on one of the great marketing slogans from the past 100 years. Bell motor cycle helmets manufactured a superior but quite expensive helmet in the 70s. The ad line simply said “If you have a $10 head, wear a $10 helmet”. Not a bad way to connect quality with value for money. By Mike Phipps http://mikephippsfinance.com.au/ mike@mikephippsfinance.com.au