Does cheap drive your short-term decisions or your long-term customer loyalty?


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I think the expression I use most frequently is, “cheap can be expensive”. Sometimes when you’re out scouring for a deal you lose sight of that fact that good service is often rolled into the cost of a name brand. What you may save on the initial price of an off-brand item may cost you big in the long run. This philosophy transfers from our individual consumer situation to our business life as well (think build it versus buy, as an example).

An important element of consumer behavior is the level of engagement that a customer has with a product or company. When I’m in the process of making a pricey purchasing decision, I read the consumer reports, I survey my friends and family, and I look at the brand with the best track record for service and support. If I do have a problem with my new T.V. or exercise equipment or whatever it is, I want to know that when I call about it my problem is going to be addressed quickly and efficiently to get me back up and running with the least amount of hassle. I mean, after all, my time is expensive too and I take that into account when I’m making purchasing decisions. I’m willing to forgive any bumps along the way of my name-brand purchases because I know they’ll meet my expectations of service and support. This train of thought defines brand loyalty.

For example, I bought a treadmill about a year ago for my home. One of those New Year’s weight-loss resolutions I was determined to keep. I researched products for about a month and finally settled on a name-brand treadmill that was ideal for someone who was looking to walk frequently (i.e. it could take some daily abuse from me and my sneakers), but wasn’t planning on training for a marathon on it (in other words, no high-impact running). My choice was not the lowest price. The treadmill arrived in four days (with free shipping), took my husband and me less than an hour to put together, and I was thrilled to have no more excuses as to why I couldn’t make it to the gym.

Unfortunately, after 30 days it would no longer power on. I called the customer service number and they sent a tech out to my home the next week. The tech arrived 15 minutes early and was at my home waiting for me when I got home from work. He spent an hour troubleshooting the machine and determined it was the motor (which he would need to order for me) and that he’d have to come back after the motor was delivered and install it. Sure enough, as soon as the motor was delivered he came back out to my home to install it. Only, it wasn’t the motor after all. Maybe it was the motherboard he thought, but he wasn’t entirely sure. But he was going to order a motherboard for me anyway and come back out and install it. If not the motherboard he said, then they’d have to replace the entire machine. Replace the entire machine? After only 30 days? Maybe I had made a mistake with this brand after all. Thankfully, after one final visit from the tech, the treadmill has been in perfect working order ever since.

It did take three visits and two parts to get the treadmill fixed, but I was kept up-to-date with the parts being ordered, the tech was always courteous and on time, someone always answered my call when I called the service number, and ultimately my problem was solved. While I had not anticipated having issues with my machine so soon after I bought it, the way my problem was solved made me feel like the company stood behind their product and was committed to getting it fixed for me. Would I buy another product from them in the future? Absolutely. And I would recommend their products too.

Maybe you’re like me and live by the “cheap can be expensive” philosophy. Maybe you are willing to pay for a good brand because at the end of the day the brand will be there for you. But how do you communicate that sentiment to your customers? Do you make concerted efforts to educate them on the benefits of your brand to turn them into evangelists?

Republished with author's permission from original post.

Jodie Monger
Jodie Monger, Ph.D. is the president of Customer Relationship Metrics (CRM) and a pioneer in business intelligence for the contact center industry. Dr. Jodie's work at CRM focuses on converting unstructured data into structured data for business action. Her research areas include customer experience, speech and operational analytics. Before founding CRM, she was the founding associate director of Purdue University's Center for Customer-Driven Quality.


  1. Jodie, I totally get your point. Yes, if you go for the cheapest price then you can expect less than good service later when you have issues in the ownership/usage phase. And I think many of us are adult enough to expect that – that is the sacrifice we have chosen to make.

    What we tend to get really upset about is then we have not gone for the cheap option we have paid a higher price and gone for the established brand – and we get ‘poor service’ instead of the service that we expected and/or were led to believe that we would get. In my case I signed up with the brand name in the UK (British Gas) to help take care of routine plumbing needs. Yet, I got terrible service and wrote about it here:

    After this experience I stopped doing business with British Gas as I could not justify paying a premium for service which was not delivered.


  2. Hi Jodie,

    No doubt that brand loyalty offers mutual benefits to both – the organization as well as the customer, but having said that, it is also essential for the customer to identify the category/purpose of the to-be-purchased product before blindly offering ones loyalty. e.g. items with low emotional involvement like bin bags/paper plates (as long as they meet the minimal eco-friendly norms).

    It is also essential to ‘re-evaluate’ your loyalties in cases where one believes that that company is charging an unjustifiedly high premium for their brand without equivalent tangible returns (does not apply for in-tangible benefits such as ego, etc. which is a every marketers dream strategy) and when one realises that there are other competitive market offerings with similiar benefits but lower price.

    To summarise – 1. price awareness/sensitivity should not be over-looked while purchasing loyal brands.
    2. Choose the product categories that mandate need for loyalty


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