The Reason You Shouldn’t Pay The Lowest Price

Written by Sean McPheat | Linkedin thumb

10 September, 2013

100% discountI love this quote, often attributed to John Ruskin….

“There is hardly anything in the world that someone cannot make a little worse and sell a little cheaper, and the people who consider price alone are that person’s lawful prey. It’s unwise to pay too much, but it’s worse to pay too little. When you pay too much, you lose a little money – that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do. The common law of business balance prohibits paying a little and getting a lot – it can’t be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better.”

When people make decisions, they weigh up lots of options. These are called ‘evaluations’ where they ‘e-value-ate’ what is most valuable or important to them.

If they want to save money, find out the background reason for that. Ruskin stated that you can’t pay a little and get a lot. What you have to take into consideration is the risk that is inherent in anything that can be considered ‘cheaper’.

The reason why someone might want the cheaper price is not always because of increased value. They might want to pass on savings to their own customers, or invest in greater service or more stock. As a salesperson, you need to find out the reason why price is so crucial to the decision-making process.

If the prospect sees price as the main or only criteria then it would be good to invest some more money in covering the risk they take in buying so cheaply. Then they can determine how much that risk is worth to them or their business. It also de-commoditises the product or service you’re offering when you assume the cost of the risk the prospect is taking by choosing a cheaper option.

John Ruskin’s quote is extremely relevant today. Any idea when he wrote it?

You may be surprised that it’s over 150 years old. Yes, what was true back then is even more so today.

Happy Selling!

Sean McPheat

Managing Director

MTD Sales Training | Sales Blog | Image courtesy of Vlado at FreeDigitalPhotos.net

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