When a 1,650 per cent price increase = value for money

31 January 2011
Alison Smith, procurement professional and life coach and Supply Management guest bloggerI’m always on the lookout for great examples of purchasing in action for this blog and my builder has handed me one on a plate. Our conversation touched on some buying behaviours he believed added value. He found buying more expensive clothes stopped him putting on weight. Or, more accurately, they acted as a motivator for him to lose weight if he started to put it back on. In his business he found that buying hammers for his staff that cost £35 instead of ones costing £2, and increasing the quality of their uniforms, saved money. Buying more expensive hammers meant he significantly reduced the number he was having to replace. Now his workers check they have their hammer with them before leaving a job – where as with the £2 hammer, they didn’t bother and just went out and bought a new one. It was the same story with the uniforms. If it’s a dirty job, the men are now more likely to put overalls over their uniform – again reducing the frequency of replacement. For the builder a 1,650 per cent increase in the price of a hammer has delivered him significant cost savings. I wonder how often we remember to factor human behaviour in when determining what really will deliver value for money?
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