A Painful Lesson on the Difference between Price and Value

Difference between price and value?

What’s the difference between price and value?  

Warren Buffet said it best: ‘Price is what you pay and value is what you get.’ 

Through experience, people generally agree that purchasing a lower-priced product or service doesn’t mean getting the highest value. It’s up to us, as architects, to prove the value we bring because this will show the difference between price and value. Done well, we can offset the focus that clients have on price.

High Value = High Price

An emphasis on price alone, especially for something as important as architectural services, will usually mean disappointment is the end result over satisfaction.

Ever hear a potential client say, ‘Why should I choose you? The guy down the road will do the same thing for half your fee’?

Yes, I bet you’ve heard it more than a few times – we all have. That client has not yet realized the difference between price and value.

You and I both know the guy down the road is NOT doing the same thing for less, is he?

Educate your clients to understand that any professional worth their salt will charge premium fees for architectural services because providing a higher value means charging more for it.

Speed vs. Quality

Unfortunately, we all need constant reminders of the difference between price and value, and the universe was kind enough to give me a free lesson recently.

On a recent Sunday night, my wife spilled a vase of water on my MacBook Pro – the lights went out and no one was home in MacLand.

Brilliant, I was overjoyed, especially since I had almost completed a long document for a client … almost, and not backed up in awhile.

I called a couple of repair guys and got quotes for $40 and $90 to do a diagnosis needed for insurance. Huh? I took the $40 option and saved $50. Or so I thought …

Yes, the message was loud and clear: ‘This is my work computer – I need it fast, please.’

Four days later, after three calls requesting a status update, I received the report for the insurance claim on Saturday. The problem was that the insurance company didn’t open until Monday … more lost time.

Am I starting to sound grumpy? Unfortunately, this was the good part.

Now, normally, water damage means getting a replacement. However, my $40 guy wanted to rescue the day and replace some of the ‘extensively damaged’ and some of the corroded parts and give the machine back to me with a 90-day warranty.

He wanted to fix my work computer before I headed to the Bahamas for a work conference and not even replace all the damaged parts.

Usually, the options for a computer damaged by water are this …

  1. Repair existing damaged parts
  2. Repair with new parts
  3. Replace whole machine

Standard procedure is option #3. I know this because I’ve been in this situation several times. Words like ‘not worth repairing’ and ‘unreliable’ are quoted by everyone else. This guy’s report outlined how he CAN repair my computer using some new parts and the existing damaged logic board. I even went as far as calling around in his presence.

‘Jesus wept,’ my friends!

A heated debate between the professionals ensued. EVERY OTHER repair shop I called in Wellington thought a replacement was the best practice and my $40 guy thought a repair using damaged parts was good enough. He was even willing to do it for the modest price of $1700!

No, thank you.

So I paid his $40 misdiagnosis fee, retrieved my laptop and headed to the $90 guy down the road, who in one day (not four) wrote a report suggesting a replacement.

Sometimes, you get what you pay for and sometimes you get what you want rather than what you need. Then there are the times you just get mucked around and have to do the job twice. That's the painful lesson I learned on the difference between price and value.

I took the cheapest option first and got what I deserved. I saved $50 but lost a week of work. By trying to save money, I received a cheap diagnosis that was really a front for expensive repairs. In the same way, cheap architectural services can be the most expensive kind when you consider inferior design, satisfaction and return on investment.

Some people know the price of everything and the value of nothing.

There's a big difference between price and value.

Remember that and make sure your clients know that, too. Arm yourself with a few good stories to make your point and you’ll be fine. People know that price is NOT the same as value but we all need to be reminded constantly.

Me included.

Hope you enjoyed! Feel free to comment and let me know your thoughts.

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