This is one of the most common issues I come up against every day. At my company (Searles Media) our focus has always been to provide more value than any of our competitors. Sometimes we'll be the lowest price, often we're not.
That difference between price and value is very important and often not well understood. Price is what you pay, value is what you get for each and every dollar you spend. Unfortunately, value is not always quantifiable, so it's up to you to know how to measure it.
For example, one of our largest services at Searles Media / Searles Graphics is commercial printing where we often lose print jobs to cut-rate competitors. It happens in any business in any industry. But nine out of 10 times, customers who decided to leave us to try one of our lower-priced competitors are back within a year. Our prices haven't changed, and neither have theirs, so why would they return?
The answer is that the value of those extra dollars far exceeds the price tag. In the case of our printing services, we proofread EVERYTHING where our competitors don't. We run color proofs for EVERYTHING where our competitors don't. We fix problems with output jobs even when we don't charge for it where our competitors wouldn't have even found the problem in the first place. And in general, we are simply easier and more pleasant to deal with in just about every single way than our competitors.
All of these things matter. Some can be quantified, some can't. You can quantify the cost of re-printing a job because you missed a large error. You can't quantify the peace of mind you get dealing with a vendor that finds those errors for you. You can't quantify the damage to your brand that's caused by not re-printing the job and putting it out anyway.
Recently I've been working with one of my smaller SEO and web design clients who had a major issue with their website. We went as far as we could to troubleshoot the issue for them but ultimately the problem was with their hosting provider and they were unable to get us access to the hosting account to dig further. In recommending options, one suggestion was that they utilize our hosting services which are more expensive than a lot of the self-host alternatives available.
While I won't go through all of the details, the bottom line is this issue that's now rendered their website all but useless for over a month would have either never happened or it would have been fixed within hours. Ultimately, they decided to move to another self-hosted provider that will save them just over $400 / year. Not chump change for a small business, but what is the cost of not having a functioning website for a month?
So as a small business owner (or putting yourself in one's shoes) the real question is, if I gave you the option to save $400 / year on your website hosting but told you it would only be functional 11 months out of the year, or I would charge you that extra $400 to make sure it was up 24/7/365, which would you choose?
Cost matters, but not nearly as much as value.
Photo: Flickr | 401(k) 2012