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WHAT 7 FACTORS CONSTITUTE VALUE FOR MONEY?

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People have different motives of buying things – from person to person, motives differ. As cash is a hard earned resource, it is essential to know what should constitute value for money. Money, and the way you manage it is a major part of success or failure. Cash, also known as liquidity actually flows; that is why it is called currency. As a ‘current,’ there is movement from hand to hand, and to justify its movement, you must see the value it actually offers to you. If the product or service on hand doesn’t match the money spent, it means equivalent value wasn’t obtained.

The need to write about what constitutes value for money arose because marketers are getting smarter everyday – they’re packaging low values with beautiful colors, and those who aren’t equally smart are spending too much on façade rather than the real thing. What has fooled people mostly is brand names – for same quality, companies with well known brand names stick their logos and sell the logos rather than the products. And because most people are crazy about brand names, they pay ten times more than they should in order to be seen to belong. Buying is all about perception – marketers play on that perception.

What 7 factors constitute value for money as you make your purchases?

Function: imagine buying a new television set, and when you take it home, it doesn’t switch on. Imagine yourself buying a Smartphone that refuses to charge as you connect it to electricity. So the first factor you consider as value for money is for the product to at least, function – if it doesn’t function, it is useless and money wasted. If a new car cannot ignite, its beauty means nothing.

Purpose: there is always a reason for buying a thing; if you have no reason, don’t buy it. The intention for buying must be met; otherwise, it is money wasted. If you buy a winter jacket, the purpose is to keep you warm – if it doesn’t keep you warm, it isn’t value for money. If you jump into the shop and see products on sale, and buy without purpose, you aren’t a prudent spender. Unfortunately, that is what many people do. Why build a massive house for rent when no one can afford it – no matter how expensive or how qualitative it is, if it does not serve the purpose, it isn’t value for money. There are many empty multimillion properties meant for rent; that was the purpose, but they have become vacuums because they can’t be afforded.

Need: if you don’t need it don’t buy it. The number one value for money is need. As you put your hand into your pocket, you must ask, “Do I really need it?” This is one question I ask myself always – I am not stingy, but I think it is stupid to buy what you don’t need. Some people’s homes are littered with what they don’t need, and on the long run, they give the stuffs away. I have decided never again to buy clothes that don’t fit because I don’t need them. Those days, when I saw beautiful shirts or trousers, even if they don’t fit, I would buy but end up not wearing them. What a waste!

Consideration: as a family man, one of the things I do is to put my family into consideration when buying certain things. I ask myself for instance, “If I spend this amount of money buying an ordinary belt, how much is left for the rest of the family?” You must consider your team as you spend; don’t be selfish – consideration is part of value for money. A product may be worth the price but if it takes comfort out of other people, it isn’t worth it. Some people don’t just care – they jump into a shop, put their last cash into a product that they don’t urgently need or that they already have a different color of. All for the sake of color, they put other people in a difficult situation – that is a senseless attitude.

Durability: in 2005, I spent about $500 buying a mere DVD player, when others sold for about $50; it was the worst electronic I ever bought because it didn’t last long – the ones I bought cheaper lasted longer. Sometimes, it isn’t the price that makes it durable; it is the content itself. We die on prices, on the assumption that the higher the price the better the product, but it isn’t always like that; sometimes, it is the package that is being sold. If a product does not meet a responsible shelf life, it may not be worth the money put on it. Some so called great brands die before they’re born – some unknown brands live on after others are dead. I am not suggesting that big names don’t last – many do, but many unknown brands also do.

Fashion: function without beauty isn’t a reflection of class. Everyone wants to hold a product on the hand that will wow people. If you wear a pair of shoes, you want everyone to stare at it for good. If you drive a car, you want people to turn round and take a second look at it. In spite of function, fashion is very important. Fashion attracts and pulls people to you. The truth is that fashion is also value for money.

Reaction: when people ask how much you bought a product, that is reaction. When people get stunned by the quality of what you’ve bought, that is reaction. Reaction is a product of all the factors mentioned above – function, purpose, need, consideration, durability and fashion. If the perception of a product is passive, you must question if it was actually worth the price paid. Reaction isn’t much of a brand name, because if you have to keep telling people the maker of your product for them to get stunned, it means it never got them stunned in the first place. If you buy a new pair of shoes, you want everyone to look down and make verbal or non-verbal comment about your new footwear. If no one notices, you will be disappointed. Perception plays a great role in determining values.

Ken is a leadership Motivation, Strategy and Personal Development Writer, Blogger and Speaker. He writes for a number of magazines and blogs. He is also a mentor and published author of several books.