I stumbled upon a quote the other day that really resonated with me – although I had thought through it many times before, I hadn’t ever heard or read it put so succinctly. It is called “The Common Law of Business Balance” which is a meditation on price and it is attributed to John Ruskin - a 19th century English poet, fervent art critic, and socialist.
It reads as follows:
“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.”
This is a classic quote on the possible folly of automatically choosing low-cost as the best way to make a purchase decision. It appeals to those who believe, or who want to persuade others to believe, that price is a possible indicator of quality. While this is not always true, it does align with my way of thinking simply because I tend to see it played out this way on the job site. For the most part (and there are exceptions to the rule just as there are examples that set the rule) the really good contractors tend to work with really good sub-contractors and the combination of these two things generally translates into a superior product – which typically translates into a more expensive product.
What I try to talk about with my friends and clients is about finding the appropriate balance between product and cost – which would be value. If you don’t appreciate the more expensive item, or can’t tell the difference between something and its less expensive alternative, how can there be value in paying for it? The only time this really becomes an issue is when someone wants to pay for the cheaper alternative but expects the quality level to remain unchanged. It simply doesn’t work out when the expectations don’t align with the associative cost.
Just something to think about.