I recently commissioned a contractor to deliver a small project for the company. When it came time to discuss the project costs, he said: “I would like to charge you $1,000 so that I can rent some equipment that will make the project easier on me…but if you can’t afford that, I will only charge you $500.”
I asked “Does the cost difference affect the final product?” He said no. “So why should I pay more?” He had no response.
That is a problem.
As the customer, I am not paying more to make life easier for you. I would only pay more to make life easier on ME. Or, I would pay more to obtain a higher quality product or service. Why would I pay more….to get the same output?
A commodity product is defined by the lack of quantifiable differences between different suppliers in the marketplace. In other words, raw copper is the same product no matter who digs it out of the ground. If you can deliver it cheaper than my current supplier, then I will change from them to you and save money.
Here is the applicable thought: If I can find someone to do your job…and they will accept less money for the same quality and quantity of work that you are now doing…why would I pay you more? Why wouldn’t I stop paying you and start paying them? Because we are friends? Because you’ve been here longer?
Is that how you make decisions when spending your money?
We all agree with that principle…until it gets personal.
Thanks for listening.