Blog: When Price should not be the first question you ask.  

source link A few weeks ago I decided to buy a complete series of a well known TV comedy. Understandably all I was really interested in was the price because regardless of the retailer of the product all the essential elements of the sale were going to be identical. Price therefor was the differentiator. Price was therefore the overriding factor in the decision process. Other products however, can be a very different proposition.

Heron Park In a recent sales inquiry within my business I was asked about the price of my Fingerprint Time Clock before I had any opportunity to determine the client’s requirements.

In spite of my subtle encouragement to explore the caller’s application they clearly believed only a simple solution was required and the only important factor was price. I didn’t argue and sent them a brochure and price list and invited them to call back if they had any questions. Looking for a simple solution I thought, can sometime suggest a lack of appreciation of how complex the issue is.

This was in sharp contrast to the inquiry a few minutes before where a Payroll Manager was very clear in their belief that price was a secondary issue. They were aware of the cost of their poor employee attendance management and how costly that was to their business. They were aware of the challenges associated with implementing any new system (particularly one that involved taking employee fingerprints) and appreciated the importance of supplier support services. They were experienced enough to know that the lowest price, best quality and best support are almost never available in the one product.

The point at which a company recognizes that it has a problem with recording employee attendance is the point at which they generally contact a Time and Attendance Solution Provider. The problem is also usually associated with an actual cost of some kind and this is the driving factor behind finding a solution to the problem. This may not be a direct cost but we are all aware of how inefficient processes cost our businesses money.

Let’s just say for a moment that your company has acknowledged that inefficient or inaccurate employee attendance recording is costing you money. Let’s say for the purpose of this exercise that this translates into $50 per week. Perhaps this is over payments due to poor calculations, time theft or something less tangible such as the cost of manual processing. I think most would agree this is not too much of a stretch for any organization.

This makes the likely savings to your business in the first year to be in the order of $2,500 per year. However, to achieve these savings your chosen product and solution provider need to perform and my personal experience is this is more likely with a higher priced solution.

It should be no surprise that more expensive solutions are generally centered around better quality products, better support and more reputable companies. The kicker here is that you are going to get your investment back anyway so why would you ever look for the cheapest option? Why would you ever make an inquiry based exclusively on this factor?


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