The Real Value of $4 to Your Business


This post doesn't have much to do with technology (except for smartphone cameras, I suppose), but everything to do with the way buyers view value, or more accurately, a really good bargain.


Here is a snapshot taken today of the lines outside the White Castle restaurant a couple of blocks from our home office at IT Business Edge.


A lot of folks around here really like White Castle; the site you're looking at has been home to the hamburger joint since 1928, so we are definitely old-school when it comes to mini-burgers. But today's lines were driven by a special promotion to mark the planned expansion of the restaurant to coincide with a spate of downtown development, including a new sports arena.


The promotion? 5 cent White Castle burgers (the original price), with a limit of 10.


By my estimation, that's a total possible savings of about $4 on lunch.


So you're looking at a crowd of people, most of whom work in professional offices in the area, who are willing to stand in line for a hour or more to save $4 on fast food that they can have literally any time, any day.


People love a bargain, sometimes more than they love real value.


What does this mean for you as a technology purchaser? Nothing much, except perhaps as a cautionary note when evaluating the inevitable price break you'll be offered the next time you tell a vendor you are considering a change. That price break may look good on the surface, but a careful evaluation of the cost/benefits of sticking with the vendor will likely show that the deal is not sweet enough -- particularly if you were sincerely ready to eat the inherent cost of change to get away from a problem with a tech or service.


Sales are always a way to get you to spend more money in the long run, whether it's with a burger joint or a CRM provider. The sale may be a great starting or high point, but in a long-term product or vendor relationship, that's true only if you are going to find real value.


I'll resist the urge to make a pun about the indigestion caused by rash purchasing decisions.


But I couldn't resist the urge to post that snapshot. Isn't that nuts?

Add Comment      Leave a comment on this blog post
Oct 16, 2007 4:07 AM Clark Atwood Clark Atwood  says:
There is no reality, only perception. The 'feel good' is the 'win' not withstanding the dollar amount. The perceived win is not $4, but rather a massive discount on something these people probably purchase a couple of times a week at regular price. In addition, the additional win is 'being a part' of an event or historical moment. Technical buyers have done this with staying up until midnight to get selected Microsoft products, games, movies and yes, technical toys.I think that short term promotional events like this are more about branding, generating excitement, establishing a perceived loyalty and socializing a company's products. Technical too try this with mixed results.Maybe if technology were as good as four sliders and a Big Red we could have HP offer Proliant servers for the original price of a Compaq mobile PC. But then again, I think it is already priced close to there (or maybe lower). Maybe cell providers should run a promo for 25 cent / minute for local calls. Perhaps long distance carriers can give us Watts-line pricing for a day.So maybe, just maybe Ken, the technical industry has been offering this type of promotion for years, you just have not noticed. Thanks for thought provoking blog. Reply
Oct 16, 2007 4:20 AM Ken-Hardin Ken-Hardin  says:
Hey, Clark.Mostly, I just wanted to post that crazy photo. Good points, and good to hear from you. Reply

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