Good Businesses in a Price Economy

I spent a few hours working my company’s booth at the Atlanta Home Show last Friday. One conversation I had was with a woman interested in purchasing new appliances. I asked her questions intended to get her thinking about her renovation needs, guided her as only a trained associate can and we parted ways with the understanding that I would have one of my sales reps contact her with more information. Just after she turned the corner of the booth, she returned. “It’s going to come down to price, you know” she informed me.

I get it – I really do.  I’ve spent more time clipping coupons and comparing prices in the past six months than ever I’ve spent before! Still, I can’t help but wonder: at what point does a price-driven economy erode our expectations for and ability to provide quality service?

On Saturday, I went to a local nursery to purchase weed killer for my lawn. I know this nursery isn’t bargain basement, but opted to go there because they offer value to me in other ways. I know I can get in and out quickly because I don’t have to cross a football field of a parking lot or wind through 20 aisles to find what I need. I walk in to a well-staffed building and am able to ask questions of a knowledgeable associate, identify the correct products for my needs, check out and have my purchases wheeled to and loaded in my car for me.

After the nursery, I went to Kroger. Several of our family’s staples were on sale and I stocked up. I did not lose any sleep over Publix’s lost sales.

Next I went to the liquor store (does anyone else hear Sublime in the background?). I could have gotten my brand of wine for less cash at Kroger, but I decided I would rather support this local store in the hopes that they will continue stocking their shelves. This seems to be a challenge in my area, so the concern is real.

Each of these decisions was value-based. I considered the value of my time, efforts and cash in each and am comfortable with the decisions I made. In the situations where I knowingly paid more than I could elsewhere I valued time and efforts over cash. When I purchased more than I’d planned at Kroger there was also a convenience value (I was already there). I may not have taken advantage of the offers had they required an extra trip to the store.

I can respect the consumers’ right to weigh their own values. I exercise mine daily. What concerns me is that a price-driven economy prioritizes cash above all other values. So much so that many are willing to drain companies of their services then purchase elsewhere on price alone. This may ultimately put those companies boasting value services in a position where their lost (or matched-price) sales prompt management to drive down costs (read: furlough, head count reductions, etc.) and cause a service level decline.

I’m not suggesting this is a foregone conclusion. I’m suggesting, rather, that in a culture holding frugality in higher esteem with each passing day, we run the risk of being swept up in a price economy and letting service fall to the wayside. There is a difference between frugality and basing purchase decisions on price alone, but the distinction between the two is fine and debatable. If we don’t pause and reflect on these decisions daily we may even lose sight of it.

If you’re planning to make a major purchase, consider the service you’ll require in making that purchase – both pre and post sale. How much time would it take you to research your purchase yourself? How much are you willing to pay to rely on an experienced salesperson to help you make those decisions instead? Take that amount and hold it in your mind as you shop around. Is saving $50 on this particular purchase worth doing business with a company you get bad vibes from or one that doesn’t provide service value? It’s your decision and it will be different in every scenario – I just think we need to be mindful and ask ourselves these questions.

Let’s be frugal. Waste not, want not. But let’s also be thoughtful, supporting businesses that aim to do good business when we are able to do so. What do you say?


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