How many times have we heard the expression, “You get what you pay for?” It usually follows a negative experience with a product or service in which you scrimped in an effort to save a few bucks. But it isn’t always effective to pay more for something in an attempt to get a higher quality.
Frugal people crave value, and are typically willing to pay a slight premium for something that will last. This means to save money over the long term, frugal shoppers will spend a little more money than cheaper counterparts, but will score products of a higher quality that last longer. Most people associate frugality with being cheap, but that is not necessarily true.
Cheaper not always lower quality. When comparing two products many people automatically assume the cheaper alternative is of lower quality. Not so. Often times the best value, in terms of bang for your buck, is found somewhere in the middle–not the highest priced product, but not the cheapest, either.
To help demonstrate this idea, Consumer Reports recently developed the Consumer Reports Value Index. The index I chose for this example shows the relationship between performance and price for rated flat panel televisions, and immediately you can see there are a number of models with low-medium levels of performance, but above average in terms of price. So in this case, you don’t get what you pay for.
According to the index, the Samsung LN40A550 was the second-best performer in the category, “Best Values in 40″-42″ LCD and Plasma TVs.” Seven other models cost more than the Samsung LCD, but only one outperformed it in testing. If you really crave value, and are willing to give up a few performance points, the Panasonic TH-42PX80U did only slight worse in performance testing, but is significantly cheaper.
Aim for the middle. The television example supports what I typically do when shopping, even when I’m not armed with something like the Consumer Reports Value Index. My strategy is reminiscent of that scene from Rocky IV where Rocky sees three Ivan Dragos (thanks to having his brain scrambled) and his trainer says, “Hit the one in the middle!”
I don’t typically go for the most expensive product, but I don’t automatically buy the cheapest one, either. The Consumer Reports Value Index supports that strategy, as those products performing above average fell in the middle of the price range. Both the cheapest and most expensive models fell well below the others in terms of performance, proving that sometimes you don’t get what you pay for.
What’s your general shopping strategy? Always buy the cheapest option, or aim for the middle of the pack?