For years, I’ve heard the expression “you get what you pay for” in the context of paying more for a good quality product or service and paying less for a sub-par experience. Recently, I’ve been speaking with many small business owners who were paying a premium for marketing services. While on the surface it sounds like a wise investment to spend money to grow your business, I dove a little deeper in each scenario. I asked the simple question “what are you getting for the money you spend each month.” The answer in most cases was a very simple “I’m not really sure.”
As a consumer, I regularly assess all of my contracts with vendors. From phone service, Internet and insurance to software subscriptions and advertising, I feel it’s extremely important to determine what services I’m receiving for the money I spend.
Here are the 4 main areas I analyze to help answer the question “what exactly am I paying for anyway.”
Cheap isn’t always good and expensive doesn’t guarantee a great experience. Know how much you’re paying and what exactly you’re supposed to get for that price. Get 2-3 price quotes for important products or services to make sure your vendors are being fair and honest with pricing.
We’re not able to determine if we’re paying too much, too little or just enough if we don’t understand the value of what we’re paying for. We recently upgraded our social media software, which cost twice as much as our old software. Because of the value our clients’ place on their social media, it’s important for us to utilize the best tools possible. We place tremendous value on these tools and we’re willing to pay more when necessary. This however is different from our feeling on ordering paper for our copier, where we are much more price conscious. Commodities typically create a much more price conscious consumer.
Do you place high value on the level of service your vendors provide? If service is important, you’re probably willing to pay more. While I’m not necessarily willing to pay a premium to my filtered water delivery company, I’m definitely comfortable with paying a premium to my web hosting company. If our site goes down, I can’t afford to wait for support!
What is the impact of the product or service you’re getting? It’s important to determine what you’re looking to gain from your purchase. If you’re signing up for digital marketing service, you’d expect increased web traffic, more online inquires and increased business. With that as the expectation, it would be easy to determine if the money you’re spending is a wise investment. It’s important to have realistic expectations and often times your vendor will help you set those expectations.
Remember, it can be good to get what you pay for, but it’s more important to know exactly what you’re getting!