If I ask people "Would you pay more for better quality or service or do you go for a lower price?" I’d imagine most people will say they don’t just go for a lower price and they would pay more for something better. However, my observation tells me people aren’t willing to pay more for better quality or service nearly as much as they say would.
My local NPR station did its twice annual fund drive last week (or is it three times a year now?). I haven’t seen any stats but I’d estimate a large percentage of regular listeners don’t contribute. They listen to the NPR programs because they like the programs. They don’t contribute because other stations are free. Then why are they not listening to those other stations? Because they like the NPR programs. It goes in circles like that.
Somehow we are able to justify paying more for better quality on physical products. Many people pay more to buy Macs because they like the quality. We all drive different cars — some are much more expensive than others. We have more trouble with the concept of paying more for better service, and maybe especially so for some types of service versus others.
I have heard and read many complaints about banks, credit cards, airlines and what not. Not once did I hear the person say they are willing to pay more for better service. No matter how good the service is, a checking account has to be free, with free online billpay and no minimum balance. A credit card must have good rewards with no annual fee.
Companies learn quickly it doesn’t pay to invest in good service. If Company A sends customer service to another country and Company B keeps customer service in the U.S., but customers are not willing to pay a higher price for the higher cost of customer service, guess where customer service will go?
Companies advertising an honest headline price can’t win business against competitors advertising a low headline price with hidden costs. Competition drives the service quality down, hidden costs up, because customers pay too much attention to the headline price.
Once you get over the mindset of refusing to pay more, you will often find better service. I recently switched to a different provider for hosting this blog. I’m paying nearly four times as much as before, but I’m very happy because I’m getting much better service.
My limited observation also tells me small business owners have less trouble with paying for quality service. Maybe they’ve been burned by bad vendors too many times. They understand the value of better service.
Next time if you find yourself not happy with something, perhaps think about paying more to someone who provides better service. Better service will disappear if people aren’t willing to pay more. If you are already doing this, I’m interested in knowing for what service you are paying more even though you know you can get away with paying less.