On Price and Value

The bridges between our personal lives and professional activities go far beyond the obvious hybridation of our workplace, and I got reminded of it again this week-end as I was walking back to my car with my 7 year old son at the end of his sunday junior soccer league game.

As we walked in the parking lot we saw a superb black Porsche Taycan Turbo S carefully manoeuvring out of its spot, and we both looked at that car in admiration of its beauty. I cannot deny that when we realized one of his friend's was in the back seat we both felt a bit jealous.

Back in our car, my son politely and candidly asked me : "Can we get a Porsche too, dad ?". He was very surprised (and I was a bit embaraased...) when I told him we can't afford it, and it made me realize he had no idea of the (substancial) price difference between this dream car and our own. He then went on to debating with himself if a Porsche's value (fast, beautiful, comfortable) was worth the price, which was both cute and depressing in a way, as a 7 year old boy should have other concerns.

I thought again of that scene later in the day and it made me think about work, and specific discussions we can sometimes have with our customers, where price is challenged.

When you sell IT Services, it is very often more difficult to get a clear idea of the value differences between several providers than it is to see the value differences between a Porsche and a more standard car. So customers tend to challenge price, considering that the value is pretty much the same across the board, when it's clearly not. It's only after the purchase that you realize the value you bought, for which the price either makes sense or not. And in the same way, sometimes Service providers suffer post sale because they lowered their price without lowering their value and therefore lose money in running the service. Discussions that happen in both instances are not pleasing ones on either side of the table.

In the latest Whitelane Research study about IT outsourcing in France that was published last week, Computacenter was ranked second in price level satisfaction among all 24 Service Providers that are part of the study. It does not mean we are cheap. It does mean that our customers think that the price they pay match the value they get from what we sold them.

And whether you buy a Porsche, any car, or IT Services, that's what matters.