The Price/Quality/Value Equation
Posted by admin in Buying Stuff
In my last post, I gave props to Triple A for its excellent handling of my car trouble yesterday. While I mentioned that paying for a tow truck might have been equivalent to the cost for my AAA membership, I am happy with Triple A and find their service extremely valuable.
That got me thinking about value.
The phrase "you get what you pay for" is common, but it's not always true. Sometimes you get much less than what you pay for, sometimes you get more than you pay for, sometimes you get exactly what you pay for.
Some would say the secret to financial success is finding cheap stuff in order to rein in spending. I prefer to find value, which saves you both time and money in the long run.
Here's my value equation: Quality/Price=Value.
You can't really put mathematical terms to this, but you can throw around some ballparks to see what really gives you value. You simply use the number 1 as your base, and anything above one is good value, anything below is bad value.
High quality/high price = 1. You got what you paid for. Same thing for low quality/low price or medium quality/medium price.
What I'm looking for are the "1+" products and services, where the quality beats the price. It might be high quality/medium price, or medium quality/low price and every so often high quality/low price.
Triple A is a 1+ service to me. It's high quality/low-to-medium price.
iPods are only a 1 to me–high quality/high price. iTunes, on the other hand, is a 1+. I can buy a song I like for very little and listen to it endlessly. Since I'm choosing the song because I think it's quality, every purchase is a 1+, unless I listen to the song too much and get sick of it, but that's my fault, not iTunes.
The guy who does my roof repairs is a 1+. He's high quality/medium price. I'd never call him cheap, but he's trustworthy, and I don't mind giving him my money.
I'm trying to think of a good medium quality/low price product or service, something that works OK but is a 1+ thanks to being so cheap. macaroni & cheese, maybe?
What are your "1+"s?
You can leave a response, or trackback from your own site.
That is not your equation. You didn’t invent this. It means little without benchmarks…you are correct on that. But some other genious came up with this.