Tuesday, January 29, 2013
What dimension of value do you use to make purchasing decisions? How will that change in 10 years?
In last Wednesday’s lecture, we talked about the critical importance of value. Beyond simply the dollars and cents of it all, value is often defined by qualitative goals (how you feel) rather than something more quantitative (getting x amount of utility for $y).
Broadly, we identified four dimensions of value:
- Performance – how well something is perceived to work
- Price – what it costs vs. what one gets out of it
- Relational – individual, personal relationship with the company/brand
- Status – the reflected glory of owning/using the company/brand
In class, I asked what one dimension of value the students most often use to make purchasing decisions. I was surprised when most students mentioned performance and status rather than price (looks like the poor college student caricature might be waning). At the end of class, I offered a bonus journal to further reflect on that question as well as share what they would expect to value ten years from now.
For me, price tends to be the first value on which I make purchasing decisions and that hasn’t really changed much in the last ten years. However, the way I look at price has changed, and has allowed me to also begin to look at the other areas more readily, particularly performance and relational.
Ten years ago, I was a year out of college and working in my first job trying to figure out how to pay bills. I left school with a mountain of debt, a car payment, and ancillary expenses like my cell phone and credit card debt. Like many recent graduates, I wasn’t making a lot of money and had to often settle for lower-quality, low-price products. In the following ten years, I had a few different careers, including one as a not-quite-successful entrepreneur, which made financial resources even more scarce. Even after getting a new job, it took years for me to settle the financial challenges that resulted from that setback.
Now that I’m a bit more established, I’m also aware of the importance of good quality, whether it be in vehicles, clothes, housing, etc. As such, I balance other areas of value, particularly performance, more heavily than I once did. I’m also incredibly loyal to certain companies or brands, especially in my community, so the relational value is more important to me now.
In a decade, I expect that I will still be financially prudent, though the other dimensions of value will likely be even more important or will trump price. Despite my experience in marketing, the status bug will likely bite me as I expect to have access to more financial resources, for better or worse. Even if I know I’m being duped, I likely won’t be able to resist.
What do you value now? Ten years from now? Do you think it will be the same?