Is price even a useful number?

We just purchased a new stove for the Moonshine farm. Since food and cooking is a big deal in our family, the selection process took quite some time. It was a great collaboration between me and my wife, where I would research and propose different models, and she would always ask “how much is it?”.

Finally we settled for a nice Smeg with a large oven and an induction hob.

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I ordered it from a nearby store rather than online. It felt good to have a physical entity with full responsibility for delivering the new stove.

A few days after ordering, the stove arrived at the store. I went to pick it up and get rid of some excess money in my wallet, and soon we were back home and ready to start installing.

Since we live in a country where just about everything is standardized, plugging in a new stove is trivial — they come with Perilex plugs that work with Perilex sockets that most houses have installed. (I’ve recently discussed some of the electrical issues we’ve had, but that’s another story.)

Except that our new and fairly expensive stove did not come with a Perilex plug. Nor did it come with an electrical cable.

I admit to being slightly upset by this omission of a rather essential piece of connectivity between the stove and the electrical system. From the manufacturer’s perspective, it makes good sense though; they can deliver the same (incomplete) stove to a number of countries, not having to care about any standard systems.

Convenient for the manufacturer, but not for the consumer.

A lot of people would be forced to get an electrician to come and prepare the stove for operations. Since I fearlessly attempt to do everything myself, I went out to get a suitable electrical cable and a Perilex plug, which I then assembled on the cable.

Stoves usually support a number of different electrical scenarios, and you configure it using metal brackets that you’ll find behind the back cover of the stove. The schema for our Smeg looks like this.

wiring

Since you want to maximize the effect in order to run everything on the stove simultaneously, you choose the configuration with as many phases as possible, so I set it up according to the top picture. (Of course, the default configuration was the bottom picture; a setup that should rarely be used.)

With the new cable connected, the new configuration in place, and everything plugged in, I was eager to test the stove. Finally!

Except that one of the induction zones didn’t work. 

There was a flashing error stating “E9”, which I later tracked down to suggesting bad sensor values. Ah well. I did get a little bit upset about the lack of quality assurance. Again, this was quite an expensive model, and part of what you pay for is quality. And part of quality lies in the testing and validation phases.

But now we get back to my good idea of buying from a “real” store, which is also very close. Money well spent!

Except that the store knew nothing about stoves. They shrugged their shoulders and directed me to the manufacturer.

The Italian manufacturer had a Swedish office, also quite close to where we live. Good, they surely know what to do!

Except that they do not perform any service or guarantee work on the products they build. Instead, they directed me to a subcontractor that handles those things.

It was not easy to get in touch with the subcontractor, because every time I called the automated answering system desperately tried to make me hang up and register my case online… And when I defeated it, someone manually hung up the phone. Three times. “Good” for their business (fewer people to help, and less staff needed), but not so good for the customers. Also bad for their long-term success.

Finally I got through and there was a real person to talk to. Who knew nothing about stoves. Or Smeg. Because they serviced a great number of brands and a great number of appliances.

Except that in reality, they serviced nothing. They had local subcontractors who performed all the work. And one such would be assigned to me. In a few days.

Two days later, I get a call from the local subcontractor of the Swedish subcontractor of the Swedish subsidiary of the Italian manufacturer. They scheduled a time the day after, and a service person showed up.

After an hour he had concluded what I already knew, that one of the zones was faulty and needed to be replaced. Finally, progress!

Except that the service person had absolutely no spare parts. Anything they find that is broken needs to be ordered from somewhere.

So now we’re back to waiting to see if/when the spare part arrives, and when we will have it fixed. There is no ETA.

There is a pattern here that goes far beyond stoves. The example shows the symptoms of a disease that has spread across most industries in the last decades.


 

 

What’s Wrong?

As consumers, we have brought this on ourselves. In a world where products are measured and compared mainly by price, we lost sight of the big picture.

And the big picture obviously paints the complete life cycle of what we purchase. Both before we buy it, and after. Yet our focus remains on that quickly passing moment when make the purchase.

Local stores, small manufacturers, ecological producers, and so forth, have screamed about this very topic at the top of their lungs for decades. Now you might not hear it so much…because most of them are long gone. Replaced by giants. Who also struggle, because their big picture is based on precisely that, size and scale.

Economy of scale (produce large quantities of the same thing to make each piece cheap). Cost optimization (produce on demand, centralize spare part storage, and other clever logistics for minimized spend). Outsourcing (let someone else do sales, service, quality assurance, etceteras, which in turn give the outsourcers the chance to work with economies of scale through specialization).

These are all solid strategies for minimizing cost, which indeed leads to what we have asked for as consumers – low prices. But the disease has spread so far that even when you don’t go for cheap, you’ll tend to get their inevitable drawbacks “for free”.

I’ll admit it. I don’t care if products are cheap or not. There are other dimensions than price that I value more:

Functionality, sustainability, quality, finish, service levels, performance, and many more. 

The problem is that with so much focus on price, it’s hard for companies to effectively compete by being better on other things. And unless we blame marketing for our lack of exposure to these other core values (it’s always safe to blame either marketing or R&D for everything), we need to accept part of the responsibility for the situation.

Which means that we can fix it.


 

Call for Action

We want a wider range of choice for consumers. Price is important, but it’s just one dimension. The way to drive change is to look beyond the price tag. Find out about the companies who produce the product. If you’ve received expert advice from a local store — buy from them instead of going online to save 10% on price. Think about your own priorities when it comes to service, cost of ownership, quality. In essence, become a more professional consumer. That’s how we best help producers and sellers to give us what we really want.

pigs

If/when you buy meat, don’t just look at the end product and the price. Find out where it comes from and how it has lived — that’s more important.

I will also argue that if you have the luxury to choose, look for a place to work that reflects your values and priorities for products and services. For me, it’s a company that cares even more about their employees and customers than growth and profit. I happen to believe that the first two can generate the second two, but it doesn’t work the other way around. (And luckily, I have just joined a company that thinks exactly the same way.)

I’ll keep you posted on any progress with the stove.

Be careful out there,
Bjorn “The Mayor” Karlsson

bjorn-karlsson

Posted in Cortex City

7 comments on “Is price even a useful number?
  1. Adam Chapman says:

    I think it’s about stoves in general 🙂 I bought a new oven when we moved into our new home 18 months ago. I decided to buy about the only British make I could find. Long story short, I got the wrong model delivered (twice) and none of the errors picked up and the 3rd time I got the right model delivered but had to act as a temporary oven warehouse until the others were picked up. With 2 more messed up attempts (wrong house, wrong van!)

    Anyway.

    About buying locally – fully support this – but every time I go to do so I get defeated by little things. It’s not about price so much but it’s about how I can make payment. Maybe it’s a UK issue – what are other countries like for this…? At the moment I’m having quotes done on getting the front of my house re-done, dig out some of the garden, re-lay the driveway in brick blocks as over 20 years of the age of the house, it’s sunk a little; put up a canopy over the door.

    I’ve got 5 quotes now at good prices and I’d love to go ahead right away but none of the builders take payment by card, either debit or credit. I’d prefer to pay by credit card as the total job cost is about £1,800 so I’d like to pay for it next month when my bonus comes in, and I’ll get my loyalty points on my card giving me effectively some money back and I also get legal protection and insurance if the job goes wrong for any reason. Why do these builders not take payment in a form that would make the consumer happy and also increase the amount of work they could undertake (I’d imagine older people feeling pretty uncomfortable having to get £1,800 out of the bank in cash and holding it at their house to pay a builder!) And it’s the same at little local stores also – no card payment for anything under £10 in value. So when I want a couple of jars of their nice homemade pickles and it comes to £8 something, forget about it. So it’s back to the supermarket which isn’t really what I want.

    There’s a lot of learning to do be done on how to be effective not only for the consumer but for your own business growth here!

  2. Eileen says:

    Thank you for this story! It’s disappointing to buy something from a local store and then have them act so clueless and take no responsibility. I had a similar problem recently when I ordered some solid oak trim from a local hardware store. When the trim was delivered in two different colors, the store was not helpful.

    When we buy appliances, my husband’s approach is to check the prices and buy the most expensive one that meets our requirements. My approach is to scour the Internet for tests and user reviews and go for one with a very high rating. The two approaches often yield the same results, which is why our marriage has survived.

    About advertising: I want to have heard the manufacturer’s name, but if they are flooding the media with moronic advertising, that’s a big fat minus. I don’t want to pay for that, and I’ll certainly buy a brand I’ve never heard of if people are saying good things about it.

    Then we order from a local store and pay extra for delivery and installation. If they can’t get it installed (that has happened!), it’s their problem.

    Smart consumers do their research and then buy local if possible. I guess the research should include checking out reviews of the local store….

    I’d like to know which company you joined.

    • Bjorn Bjorn says:

      Thank you Eileen,

      I really like the approach taken by you and your husband — looks to me that you are precisely what I talk about in the story; professional consumers. (I especially like that your husband aims for the most expensive model meeting your requirement. :-))

      I’ll very soon be able to disclose the name of the company.

      /Bjorn

  3. Acke says:

    It’s spells Husqvarna

  4. Bill Baca says:

    Excellent post Bjorn! You have stated well the situation most of us have experienced, hopefully by exception and not by routine. Nevertheless, a real pain. I like your advice and support this personally. I recently tried to buy locally (for a windshield replacement), but a national company, located in the next city, ultimately had a very good price advantage, and the service was exceptional. So, while it is important to give the local guy a chance, it is good to have alternatives.
    by they way, I am glad you found a company that puts employees and customers first – I hope to find the same.

    • Bjorn Bjorn says:

      Thanks for the great feedback, Bill.

      You make a very good point about the local guy/gal vs. the national/global companies. Good service and a customer-comes-first strategy is absolutely open game to any company willing to go beyond current trends — or back to the way things used to be, if you will.

      /Bjorn

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