What You Pay For

When I was a teenager, my parents told me that they would match whatever I could save in order to buy a car. I worked very hard toward that goal, and when I had saved enough, my parents honored their promise. I loved that car and took excellent care of it. It was always clean and well maintained.

When the time came for my younger sister to drive, she inherited my parents’ Cadillac. Because she did not have to pay for it, she was not as invested in the vehicle. She didn’t get oil changes when she should or follow a maintenance schedule. It wasn’t until the car started breaking down that she began valuing the independence and security that the car provided her.

This lesson applies to business. Most of us have witnessed first hand the truth of the statement: People don’t value what they don’t pay for. It is for this reason that I never recommend that a company compete solely on price. Devaluing your product or service is a lose-lose; you will have to make cutbacks internally that eventually sacrifice quality. Instead, at TechSoft Systems, we strive to compete on service. Of course our products and services have to be priced strategically, but it’s in the area of service that we know we can shine brightly. In this way we are providing the best value to our clients – not simply the lowest price. Furthermore, outstanding customer service builds customer loyalty, whereas if you compete on price alone, you’re likely to lose your customer base when a competitor comes in a little lower.

What are you giving away, personally or professionally, that is not valued? What changes do you need to make to ensure more win-wins?

Clifford A. Bailey
small business advocate and CEO of TechSoft Systems, Inc.