After last week’s blog about Price Vs. Cost, I started thinking a bit more about my lawn service decision and I realized something important. In a world full of choices (and opportunity costs), the concept of cost, price and value tend to get a bit confused at times.
Let me explain…as I discussed last week, I decided a long time ago to hire a lawn service so that my weekends are spent with my family vs. doing the yard. However, it was not as simple as that. There are tons of lawn services that are available in my neighborhood. So, I had figured out the Price vs. Cost concept in my head, but was now on to Price Vs. Value.
Price Vs. Value At Home
I chose my lawn service for many reasons that had nothing to do with how much they cost. They were not the cheapest of the ones that I was considering, but I know that you get what you pay for in almost every walk of life. I needed a lawn service that would show up as scheduled, do a thorough and professional job with my yard, use updated equipment, friendly and trustworthy employees, have flexible payment methods and were prepared to make amends when problems occurred. I’m not naive to think that problems won’t occur at times, but a company that can make things right has value that can not be expressed in dollars and cents.
This is what I mean by Price vs. Value. Let’s say that I went for the cheapest option for lawn care. I have no guarantees that the company will be around in 6 months and then I’m right back looking for a new provider. Also, I have no idea if they can trust their employees, so how do I trust them when they are around my home and my family once a week? These are just a few concerns that I considered when looking for the best company, not the cheapest company. The VALUE of a good provider, outweighs the few additional dollars that I pay per month.
Price Vs. Value At Work
I see this concept all of the time with my Houston Courier Service. It seems like every Tom, Dick and Harry thinks they can start a courier service. In one year, I have witnessed the coming and going of over 20 different small Houston Courier Services. My courier company has been around for over 30 years and I still get pulled in to price wars with fly-by-night services that will likely shut their doors within a month.
Our business is very different than most Houston Couriers. We don’t sell on Price, we sell on Value. We have spent thousands of dollars to have the most updated technology that provides real time tracking of packages, online order entry and reporting. We are fully staffed to prevent long hold times on the phone and we train our customer service department to treat customers with the utmost respect. We have a 99% on-time delivery percentage and don’t over-promise to our customers. We can stock inventory in one of our several distribution warehouses across the city. We are not a company that wants to compete on Price. Surprisingly enough though, our bids are usually not very far off from the cheapest/unreliable provider’s bid.
In this economic climate, it makes sense to watch your spending and cut back in areas where possible. But, again, make sure you are watching the Price Vs. Cost and the Price Vs. Value. You could be stuck doing everything on your own or working with people you can’t rely on. That’s the last thing you need right now.
Until Next Time,
Eric
