23103-3f32e7b4In an earlier blog, we explored how sometimes saving a few pennies is not worth the effort (or time) that it takes to save those same pennies. In this blog, I want to explore why else it may not be worth saving a few dollars, when it comes to your referral relationship.

When it comes to networking, the money you spend can be one of the highest motivators. So when you are making a purchasing decision, you have to ask yourself, what will be the most important factor in making your decision?

Often times, as entrepreneurs and business owners, we are not the least expensive option. AND we feel that we deserve to be paid for what we do.

Sometimes when we shop, we used price as the only qualifier… We have explored this side of the conversation in my blog about toilet paper, today I want to explore this and how it affects your network.

Echel_AC_Outdoor1_PAs an example several years ago, I needed a new air conditioning unit. We got three quotes for a new air conditioning unit. There was about $1500 difference between the least expensive and the most expensive, close enough in pricing that they all seemed reasonable.
Which quote did I pick?
I ended up going with the most expensive option.
Why? Not because it was a better system or more was included – I believe they were probably comparable systems.
I chose the option I did because of the relationship that I had with the provider. They are a great client and pass referrals to us, as well as supporting charities that I am also involved with.

For me, paying a little bit more was WELL WORTH it to me to strengthen the relationship.

I was recently sharing the story with a group of Certified Networkers and one of them asked if I had gone back to the provider and asked for lower price or inquired why it was more expensive.
My response was NO. I respected their pricing.
Now, had I chosen one of the other options, and the company found out about it, it could have damaged my referral relationship with the company.

Another story:
My husband Rob shared that a couple months ago he was working on pricing for promotional products for a referral partner. We have passed referrals to them in the past, and were a client.
A couple days later we learned the company ordered the items online.

Why – so they could save five cents per item.
Multiply the $.05 by the 100 items they got and they saved five dollars.

VL_366761

The impact?
$5 saved.
And now Rob is asking, do I really want to pass them more referrals? Do I want to still be their client?

 

The moral of the story: Price may not be the most important factor when purchasing; make your decisions accordingly.
In an upcoming blog, we are going to take a look at how much is too much more to pay… another side of this conversation.

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About Tiffanie Kellog

Tiffanie loves to help people make more money while saving time, so they can hopefully have more fun!

10 responses »

  1. Tom Fleming says:

    Good one…

    Was speaking with Mickey earlier who said he stopped by the Brewhouse to make sure everything was on track for you in terms of set up… What a sweetie…

    Anyway, how’d it all go… Many/any visitors there? Any of them convert for you?

    Hope it went GREAT… Been thinkin of ya!

    Tom Fleming

    Executive Director

    Tampa / West Central Florida

    352 527-7755

    http://WWW.BNIWCF.com & http://WWW.BNI.com

    Prosperity through Collaboration, Leadership

    and Integrity towards 50 + 10 + 1 = 61…

    New Image

  2. My recent “Aha Moment” was realizing that I don’t want the image of my business to be the cheapest guy in town. I want my agency to be known as the one who provides you with the proper coverage and makes it easy for you to obtain. I considered how many other businesses want to be known as the cheapest guy in town. While I’m sure that there are those types of businesses out there, I believe that the majority of quality small businesses strive hard to offer a quality product and try to offer service that sets them apart from their competition.

    Recently I was getting quotes for a life insurance policy for my son and was initially put off by the price. Then I took a few moments to consider the difference between the good policies and the cheap policies that we offer in our business. Once I took a closer look at the policy that was being offered to me it was easy to see that this more expensive policy offered many more of the things that I was looking for. It was an easy choice after that.

  3. The price is not always the cost! Nice examples Tiffanie!

  4. At a certain level, price may be the deciding factor but for the most part it’s third or fourth down the line. I often prefer to make my choice and then bring price into the consideration pile. If I had a far and away winner, price won’t sway me. If two choices were neck and neck, it may.
    When it comes to long term partners, price is rarely what will tip the scales.
    Great insights, ‘Tiffanie.

  5. Exactly, Tiffanie. Price is not always the most important factor.

  6. Celeste Clancy says:

    This blog has been so thought provoking ! It’s made me stop and consider some of my referral relationships in a different light – Thanks ! Has this ever happened to you: I heard recently that a member of networking group took a “quid pro quo” approach in a transaction with another member of the chapter – as a result, they turned a warm relationship much colder. The member, while they did not utilize this particular member’s services directly, actively sought and gave referrals to the other member over a period of years. When an opportunity came for the “quid pro quo” member to utilize the other’s services, that member stated “why should that person earn a commission from me when they don’t use me?” – they never took into consideration referrals received over multiple years and thus lost referability.

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