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Paying a Premium - The Box

Paying a Premium

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I bet you can empathize with some variation of this common story of frustration. When making a regular left turn on a regular Thursday in his Toyota Tacoma, David hears an odd noise coming from under the hood. He’s no mechanic, but he knows it’s neither normal nor is it good news.

Piggy_bank

After a short attempt to research mechanics nearby, David gets three quotes. The first quote ($50), he can cover with the cash he has in his wallet right this moment. The garage was dirty and haphazardly thrown together, like all garages are, right?

The second quote seemed like a joke. “$320?” David began to think the mechanics seemed to be on a level beyond a simple rumbling Toyota Tacoma, especially when eyeballing the impressive cars in the garage. Even if he wanted to take them up on their offer, he’d have to move some money around.

The third and final quote was at a well-known chain. Everything was clean and well branded, but the mechanic that met with him was visibly going through the motions. “It’s a system,” he thought. “That’s what makes them so reliable.” The mechanic prints out an automated quote sheet, $128 gets him a diagnostic and if they guessed right, he’ll be out the door for not a penny more.

As consumers, we run into this all the time, don’t we? When seeking mechanics, choosing a healthcare practitioner, and even choosing where to have a night out for dinner there always seems to be a spectrum of cost. With pros and cons flying everywhere, I’ll tell you what most people do.

Most people in David’s position will use one of two approaches. Some will roll the dice on the bargain that the $50 garage is good enough. If it doesn’t work, the $50 gamble doesn’t break the bank, and come on “It’s just a weird noise, right?” Others will pony up for the middle option.

What happens next is like clockwork. The $50 option will almost never the live up to expectations. At best, David gets a fingers-crossed-type of solution and a below average experience. At worst, David hypothetically sets fire to $50 and enrolls himself in a long road of smaller payments and little progress. The brand-name garage will cost a little more and probably be more reliable, but the experience won’t be great. The detached nature of the experience will always be underwhelming, and you’ll never walk away content. At best he gets his truck fixed.

Especially in an economy like this one, it’s difficult to justify paying a premium for things. And, I’d argue that it’s quite irresponsible to always pay the highest premium for goods and services. The example is still a potent teacher, however.

People with the greatest passion and attention to detail to their craft provide the best goods and services on the planet. Chances are that the folks that execute their work in this manner realize that: A) greatest doesn’t come from a “dirty, haphazardly thrown together” work space that fights to have the most affordable pricing, and B) the reward structure of playing follow the leader at Jiffy Lube isn’t an environment for the best mechanics in town to thrive.

So, if you really care about a particular purchase, focus your eyes on paying a premium when researching goods and services and work back from there. If you’re a consumer, I may have just convinced you to fork over more cash for a premium product. If you’re a gym owner, let me ask you: “Which kind of gym do you run?”

Logan Gelbrich
@functionalcoach