Price or value?

Do we buy on price or on value?

Trade is everything, and we all trade – from selling ourselves every day to a smaller or larger audience (family, friends, colleagues) in return for attention, belonging, love or a salary, to “classic” trade along the lines of “I need this so I can do that”.

What guides you when you decide to buy? What are you actually paying for? A low price for a product or service, a name (brand), or the wider benefit of what you buy – its usefulness and broader value?

We are all different and guided by different attitudes that come from our deepest beliefs. To a greater or lesser extent, those beliefs were handed down to us by the authorities who accompanied us through life (parents, teachers, older colleagues), who in fact defined their own experiences as “rules” and imposed them on us as the norm. Of course, each of us also has beliefs formed by our own experience.

01An example

You own a furniture factory. What drives you in this business might be the challenge of becoming recognised in your industry, signing a contract with a large, well-known client, running a chain of furniture showrooms with a recognisable brand – or simply a love of creating, a love of working with wood.

As the industrial era draws to a close and we move steadily into the information age, you are forced, like it or not, to change as a manufacturer: your habits, your equipment, which now has to follow new trends and new customer demands… So you replace machines with more complex, faster, more precise ones – and with them the energy source, the compressor bought at the start of your story (“and the old one was really good and never let us down”).

You consult friends and colleagues in the industry, exchange opinions and experiences, collect information from available sources – the standard procedure before a decision. You have gathered comments from people you trust and information about available compressor offers. You have material to work with.

What will be decisive in your purchasing decision? Price alone, or what you get for the value of the money you invest?

02What is price and what is value?

Price is what you pay; value is what you get by investing a certain amount of money in something – in this case, equipment.

If we talk only about price and are guided only by price, competing on price is a never-ending game that ultimately becomes pointless. So your search is not a search for a price, but for something that will meet your needs and give you value. The more needs it covers, the better the investment. So ask yourself again: do you buy on price, or on the value you actually get?