I keep trying to prove the old adage, “You get what you pay for,” is wrong. I want to pay little, yet get a lot. This a question of cost versus value. By nature we seemed wired to focus on the cost of a product or service. By changing your focus to value instead, you will make better decisions, get better results, and even save money in the end. Here’s how.
I recently grappled with the cost versus value equation regarding my exercise. Over the years, I’ve joined various gyms, bought home equipment, and downloaded exercise apps. My results were always mixed. I would do well for a period of time and then it would drop off.
Two years ago, I heard all the fuss about the Peloton bike and classes. I thought it would be the same as the other exercise plans I’d tried. So, I did nothing.
A year ago, after hearing even more people rave about their Peloton results, we bought one. It wasn’t cheap and it came with a monthly fee for the online classes.
What’s my return on that investment? I’ve never worked out more in my life!
From March (when it was delivered) to December 2021, I worked out 175 days. (Update: In 2022 I worked out 217 days.) These results make the Peloton the cost effective workouts of anything I’ve tried, even though it was the most expensive service.
Here’s the lesson: value is the results you get divided by the cost. Value is what works, not how cheap it is.Value is the results you get divided by the cost. Value is what works, not how cheap it is. Click To Tweet
Examples of Cost Versus Value
Here’s a couple more examples of cost versus value:
The Coaching Mastery Certificate Program requires an investment of time and money and has a tremendous value in terms of participant results. It produces extremely valuable shifts of mindsets and behaviors. Participants learn communication and leadership skills that can be immediately used in work, ministry, and everyday relationships. The price tag for these results is less than most other training programs out there of its length and type, and yet, more effective. That’s value.
A coaching engagement might feel expensive, but produces value beyond other types of assistance. Think of all the unused self-study courses and books you’ve purchased. The information they hold is valuable, but the value to you is only in the results from your application. It you don’t consistently apply it, there’s no value, regardless of how inexpensive it is. Coaching produces valuable insights while supporting you to apply those insights. The value of coaching is the results you see in your relationships, work, and life.
One more example: relationships. Consider the effort (cost) to maintain a good relationship and the happiness and fulfillment (value) it produces. The low-cost relationship is shallow or fleeting. When a person does something that offends us, we move on to someone else. But how satisfying are those relationships? When we put effort into a relationship by working through conflict, listening, making known and adjusting our expectations, compromising, forgiving and being forgiven, we grow as a person. Our relationship has history and progress. It goes deeper to more emotional levels. As humans, we find greater satisfaction in this type of relationship, and thus, are happier and more fulfilled. The cost in terms of the work to grow that kind of relationship is higher, but the value to us is also higher.The best way to make a purchase decision is based on the value you can reasonably expect to receive. Click To Tweet
Getting better results by being value focused
As you consider cost versus value, it’s easy to take a quick look at the price tag and decide. The problem with this is most of us are cost focused. We want to spend as little money, effort, or time as possible, yet still hope to get great results. This is faulty thinking. Here’s why.
- Cost focus makes us susceptible to sales “pitches.” We buy into the hype and disregard the wisdom of, “If it looks to be good to be true, it is.”
- Once we spend on a cheaper solution, we become emotionally attached to making it work. This is called sunk cost bias. We, “throw good money after bad,” trying to make it work, wasting more money and time in the process.
- We trade time for money. Yet, this is a mistake due to our misconception of these two resources. Time is fixed and never replenished. While money comes and goes.
Measuring value takes more thought than looking at a price tag and set of features. The best way to make a purchase decision is based on the value you can reasonably expect to receive. To make value focused decisions ask yourself these questions:
- What problems does this product or service address? How well does that align with my needs?
- What results does this product or service claim to provide?
- What effort do I need to make to get those results? Am I willing and able to do that?
- What support is provided as I go for those results?
While there are rare exceptions, 99% of the time “you get what you pay for.” If you focus on the value you will receive, rather than just the cost, you’ll end up getting more useful results.
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