Whats the difference between the lowest price and the best value?

I’m not sure exactly how many people out there mix these concepts up but I’ve definitely come across a few people who don’t understand the difference between the cheapest overall price and everything you get per pound spent.

This is an important distinction that needs to be made because many businesses offer a solution rather than a specific service and they can often add value to your life through time savings and using their knowledge to improve the way you work.

I’ve seen quite a few instances of this over the years and maybe some of the more common ones include using the cheapest garage to MOT your car and then having it fail because they need to sell you more work to make enough money. Or perhaps buying the cheapest product and then having it breakdown on you so you have to buy a new one.

Unfortunately one of the reoccurring themes relating to my industry (Accountancy) is the accountants out there who literally do what it says on the tin, don’t get me wrong there are plenty of good ones as well but there are many who sell themselves on price and then have to stick rigidly to the agreed services to make their margins work.

A good accountant should be an advisor as well as take care of the compliance work, this means that instead of tearing through tax returns at breakneck speed and declaring the job done they should be analysing the figures for consistency, flagging anything that looks abnormal and talking to their client about their family situation and what they want to achieve from their business. This opens up the road for tax planning to take place and can protect a client from HMRC tax enquiries which are both things that can save the client thousands of pounds from a small amount of time spent.

Regardless of your business type there will always be a good, better, best ranking against your competitors and your pricing will relate to where you sit in that ranking. Successful businesses aren’t always the ones selling the most expensive service or product, they are the ones that justify to a customer effectively on why the service is worth the price. This can sometimes be done by including a list of the features of the service or it could be done by using social proof like testimonials and case study’s to highlight the benefits.

As a small business owner myself my time is incredibly valuable as having more of it can help me bring on more clients. This means that my primary concern is finding a good balance between price and the effort needed to manage the supplier as well as considering the referral opportunities by using them. That’s right, suppliers can send you customers just as easily as you can refer them to others.

Understanding what you want from a business you buy from can also help you to improve your own customer’s experience, the key question I always ask before I send a piece of work to a client for review is “If the tables were turned and they were sending me the work, would I be happy with the standard and am I making it as easy as possible for the client to respond?”

I’m a Chartered Management Accountant based in Northampton, if you feel that your business could benefit from working with someone me who makes it as easy as possible for you to focus on what you do best then please get in touch for a free initial consultation.

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