Cost vs. Value – short-term thinking… long-term harm

Originally posted by Marc Price

Okay, first off I need to apologise if this turns into a rant… I’ve seen a number of clients and prospects over the years try to screw down costs, but never more than recently.  I’m starting to wonder what’s going on! Recession or not – value is surely more important than cost!

Whilst I can appreciate everyone is looking for a ‘good deal’, it’s really the sign of an experienced marketeer when they look for best value rather than cheapest.

Most of us will do the same in a supermarket – you don’t just purchase the Waitrose Essentials or Tesco Value range for everything (which are clearly the cheapest) – you seek out the deals and balance quality against cost to ascertain the best value.

For the benefit of any marketing neophytes out there – here’s the distinction between cost and value:

Value = Benefits / Cost

So whilst Tesco Value Bacon* is cheap, one may say that due to the fact that it’s full of water (to increase the perceived weight), the benefit of more expensive bacon means that Tesco Value Bacon isn’t actually the best value (as it shrinks to nothing and tastes pretty bland to me).

As I say – experienced marketeers (and the more intelligent newbie marketeers) ensure they apply a similar thought process when engaging marketing agencies. But we’re seeing more and more inexperienced marketeers out there making decisions purely based on cost.

We encountered an extreme example of this recently when a respectable client came to us to discuss their new website requirements. Understanding their requirements we recommended a .NET based CMS including licensed 24/7 support – only then to have the client switch at the last minute to an open-source solution that saves them a few grand in the short-run, but throws up a whole host of integration issues, lack of support and updates in the long-run (costing them more overall).

Don’t get me wrong, I love WordPress and the like… but there really is a time and place! Sadly short-term cost savings won out over longer-term value and usability here.

But it’s not just websites we’re seeing this problem with. It’s creeping into all areas of marketing. It’s the “well, we could design it ourselves” or “we could write the copy” attitude that is undermining the benefits of working with an experienced agency.

Yes – you can DIY a lot of marketing these days… but the audience is getting smarter. It’s easy to spot a homemade email or in-house ‘designed’ web-banner and it just says to your audience that you’re struggling to afford decent marketing (which implies your sales are not good) – a big turn-off for anyone considering investing in your products or services.

What did Apple do in times of hardship, or Marks & Spencer, or even Hush Puppies? Did they cut corners and put out a shoddy ‘we are cheap’ message? No, they invested more in their marketing, kept their pricing where it needed to be, and carved their respective niches for delivering higher valued items that were worth spending money on. It’s this confidence in product and determination not to skimp on essential marketing quality that elevates brands from mediocrity to respectability and in the best cases desirability.

I can already see a number of brands who will be here (and doing well) in 5 years’ time, and some that have already lost sight of the importance of value – blinded by cost saving… cheapening themselves, putting off customers and prospects and falling into the ever decreasing cycle of devaluation.

So, next time you think about doing your marketing more ‘cheaply’ – cutting costs here and there – take a moment to think whether it’s really the best value you’ll be getting. We want you to be around in 5 years’ time too!

*Sorry Tesco, but it’s true… your value bacon really sucks (IMHO).