Few phrases say more about an individual than those five words. So much is communicated when one judges a product or service based on the price alone.
The fact that you can find anything these days for a cheaper price shouldn’t come as a surprise. The surprising part is people still use price as a major factor in decision making, when they verbalize their frugal attitude it labels them.
1. When you say the words “I can get it cheaper” you seem, well, cheap.
We don’t look up to cheap people. Do you have a friend or family member brag about a “deal” they got at Walmart? Probably not because that’s not something to brag about. We look up to people who are generous, who don’t count the change after some one gives it to them, who tips more than they should, who doesn’t make a big deal about money ever. Those are the people I look up to.
In the creative field you can always find someone who’s willing to do what you do for a cheaper price, but that price comes with a cost.
Just because it costs less at first it may end up costing you a whole lot in the long run. I find in my old age I’d rather pay a good price for something and get a great product in return. Every now and then when cutting costs you get burned. Ever buy something just because it was cheap? Tennis balls, never buy the cheap tennis balls, I’d much rather pay more for a better quality ball.
Pizza, sure you can get cheap pizza but c’mon Sparky’s isn’t even that much more but the taste!!
As a kid it was hockey sticks. You could buy a cheap stick at Superstore but it won’t last long.
I wrote about this 7 years ago, labeled it as “Walmart Culture” cheapest prices for the cheapest products, it wasn’t sustainable. Now in 2017 it has become extremely apparent some people will always use price as their major deciding factor.
Price is a calculation, value is a feeling.
Be careful not to confuse the two, value is a much bigger topic for another day.
When you worry about price too much you seem cheap. The most valuable products cost more than average products. In almost every industry their is a leader in the premium brand category, they command a premium in return for a wonderful brand experience. From jewelry, jeans, vehicles and entertainment, be it Tiffany’s, Lulu’s, Audi’s, or Cirque, the best brands cost more and we love to pay it.
Yes there are exceptions to the rule but if you argue the exceptions often you’ll find you’ll have nobody left to argue with. I buy the cheap pop, no-name butter, and orange juice. Anything I find valuable, hobbies, work, presents, I don’t buy the cheapest one, that’s a terrible strategy.
2. When you “get it cheaper” you actually get less value, psychologically speaking.
Why did the cheaper energy drink prove less effective? According to Shiv, consumers typically suffer from a version of the placebo effect. Since they expect cheaper goods to be less effective, they generally are less effective, even if the goods are identical to more expensive products.
In a fascinating study done at Standford, Baba Shiv found that every time a student paid less (got a deal) for a Sobe Adrenaline Rush beverage they solved 30% fewer puzzles afterward. It was as if the students who paid full price for the drink for more value out of it.
“Baba Shiv, a neuroeconomist at Stanford, supplied a group of people with Sobe Adrenaline Rush, an ‘energy; drink that was supposed to make them feel more alert and energetic. (The drink contained a potent brew of sugar and caffeine which, the bottle promised, would impart ‘superior functionality.’) Some participants paid full price for the drinks, while others were offered a discount. The participants were then asked to solve a series of word puzzles. Shiv found that people who paid discounted prices consistently solved about thirty percent fewer puzzles than the people who paid full price for the drinks.”
Find this story and more here: 33 Lessons in Neuromarketing
The same goes for wine, you may be able to “get it cheaper” but you aren’t going to enjoy it as much.
In another Neuromarketing themed study done by our favourite marketing professor, Baba Shiv, explores Wine and how price changes how we perceive the taste. Comparing the same wine in a blind taste test where you tell the participant the first wine is $5 a bottle and the second is $45 will net the result of the $45 wine tasting much better. Our brains are very powerful and the placebo effect is at work again. Lesson learned, buy cheap wine, pour into an expensive bottle, you now have expensive wine! Your brain won’t know the difference.
Wine has always been a hot topic for inflated prices with deflated value. The higher the price does not mean the better the wine, you can find amazing wine for a relatively low price.
Another reason why when you tell others about a “deal” you got or a special price you paid for something, you may not actually get the full value out of it. Paying a good price for a good product is expected. We lose as a society when people expect to get everything cheaper and cheaper, that’s simply not sustainable.
I’d much rather above average price for a product if I know the company I’m buying from actually cares about my community or the planet in some way. This is how you can influence companies, with your very own purchasing patterns. Make a point to only support “good” companies. I’ll let you determine what “good” is. Here’s a start. Stop going to chain restaurants, if you must eat out find a place that locally owned. Buy from your local farmers market. Buy things you need, not just want. If you must buy something you “want”, try make sure you’re buying from a good company. Buy local beer. Buy Canadian Wine, we need to support our own much more in this category.
Now I’m not going to get all green “peace-y” on you but where you spend you money is the biggest sign of what you believe in. If you actually think your own purchasing patterns don’t make a difference, remember, a clean neighbourhood, a safe community, an awesome place to live, all started with someone giving a damn. You should too.
3. We don’t look up to people who are “cheap”.
Leaders don’t seek out “cheaper” solutions because they know you get what you pay for. There’s something psychological about cheap people, we don’t want to be like them. Do you brag about a deal you got a Walmart? I hope note. The world has changed, we know you can get it cheaper but we appreciate you paying the full price.
We all have that friend that does everything for you. You know, always there to lend a hand, they aren’t cheap at all, they’d never count the change or expect you to “get them back”. That’s why we look up to those people, they are the opposite of cheap, generous.
What about companies being “cheap”?
You may get a deal on Groupon but you won’t become a loyal customer. Couponing, offering discounts, giving kick backs, they all aren’t sustainable. I mean you can do them to “create new customers” but if someone buys from you once then never comes back was is really worth it?
I find in this overly transactional world we tend to value the sale today far more than creating a relationship that could blossom tomorrow. Would you sell a product to me today knowing that I will never buy from you again in leu of trying to create a relationship and possibly a long-term customer? I think a lot of people do this unconsciously. A relationship is far more important than the sale, stop worrying about selling and start making meaningful relationships.
Do you want people to look up to you? Start being generous, start serving others, stop throwing your pity party and start helping people. You’ll surprise yourself with how generosity can make your life better.