When We Hear Someone Say Our Price is Too High
My first business job after my military service was selling mainframe computers for IBM. IBM was a premium provider. They charged a little more than their competition, but their equipment, software and service always delivered a lot more value to the customer. The quote below was shared with me while I was there; I have always carried a copy in my brief case as a reminder.
COMMON SENSE VS. NONSENSE “It’s unwise to pay too much, but it is worse to pay too little. When you pay too much, you lose a little money--that is all. When you pay too little, you sometimes lose everything, because the thing that you bought was incapable of doing the thing that it was bought to do. The common law of business balance prohibits paying a little and getting a lot--it can’t be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better.” ~John Ruskin (1819-1900)
Ever since my IBM days, I have always been proud to sell the premium product in whatever business I was engaged in. Invariably, that product or service was sold at a premium price. That price was necessary in order to be able to pay for sustained advanced R&D, best available raw materials, coupled with world class customer service. On balance, our Value Proposition provided far more for the premium price charged than did the lower cost providers. In many cases, they often provided far less.
A decent coat of paint can make any boat new look shiny, but what’s beneath the surface? What happens when the boat is a year, or two, or three years old? Some programs just pass old soft boats down to their novice rowers. What is the problem with this picture? Would you try to teach someone to play tennis with a flexible, worn-out racquet? Of course not. So why would you expect new rowers to become excited about the sport using poor equipment? How can you expect them to quickly learn proper good form from a soft boat that doesn’t provide necessary tactile feedback? To me, this is the epitome of false economy.