When Cheaper Isn’t Better

 In Business Advice, Business Operations, Operations Management

Have you ever heard the adage “price is what you pay; value is what you receive”? When it comes to reviewing whether a prospective company will be a good fit for your needs, price should only be one factor. Often, cheaper isn’t better, and in the long run, cheaper services could cost you.

When Cheaper Isn’t Better

We recently spoke with a business banker about his experience of moving his family from Florida to Colorado. Cross-country moving costs are expensive, so our friend performed a cost comparison of several major moving companies.  He elected to use a “lowest-price-technically-acceptable” approach to make his selection.  This approach, frequently used in government contracting, basically states that the “lowest price” which is “technically acceptable” is the choice that should be made.  The government uses this approach frequently– with some good and not so good experiences.  Sadly, the banker did NOT have a good experience.  This cheaper company broke or damaged all of his family’s worldly possessions in the move.  In fact, the only possessions that survived were those that the banker packed himself.

Sadly, the banker now wishes that perhaps cost shouldn’t have been the primary deciding factor.

Our Advice

In our experience, we like to advise our clients that price is only one factor that should be reviewed– and in most cases, price is NOT the factor that should receive the most attention.

The hassle of having to file insurance claims, having to go out and purchase replacement furniture all the while moving to a new location, not knowing where anything is and beginning a new job with a new company are all stressors that one should not have to deal with. Need more advice? Give us a call!

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