We sometimes get asked by potential customers why you have to pay for Glasstap’ services, when there are free resources on the internet for those looking for training and development ideas. With all the hoo-ha about Black Friday, it felt like as good a day as any to write a blog about cost, perceived value and why free isn’t always good.
To start us off, imagine you are in the market to buy a new car. You can only buy one car, and you’ve got a choice of just two. (Let’s assume, for the purpose of this exercise that you can afford either.)
The first option is an almost new Jaguar and you could pick it up for £15,000. It’s reliable, in good condition, comes with a full two-year parts and labour guarantee and has had one careful owner.
The second is much cheaper, just £4,000. It’s a bit rusty in places, slightly untidy, and it won’t always get you from A to B without you stopping to top up the oil. On some occasions you know it’s going to break down completely, in which case you’ll have to ask your friends for a lift - or walk the ten miles to work.
Before we go any further, make a decision. Which will you choose?
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I’m guessing that many of you chose the Jaguar, perceiving it to be better value than the clapped out rust bucket.
But what happens if we reduce the price of both cars by £4,000?
Now the Jaguar costs £11,000 but, hang on just a tickety minute, the second car, is, oh my goodness, it’s FREE! Oh, how we’re drawn to that word, like moths to a halogen light (and we all know how much that benefits them). We LOVE free because it feels like we can’t possibly be making a bad choice. After all, it’s FREE! It doesn’t matter if it’s not any good; it’s FREE.
Stop!
If the Jaguar was worth £11,000 more than the rust bucket before, what’s changed? It’s still just £11,000 more expensive – the relative value of the two products hasn’t changed. Which means that changing our original decision to now choose the free car is irrational. ‘Buying’ the cheaper car is still going to result in us having a less good, less reliable product. We’re still going to have the same walks to work, and the extra we’ll need to spend to get a Jaguar hasn’t changed.
It is a case of what Dan Ariely calls being Predictably Irrational and if you’d like to know more about this phenomenon and many others, I’d strongly recommend his book, Predictably Irrational: The hidden forces that shape our decisions. (ISBN 978-0007256532). It’s a fantastic read and it’ll not only help you make better decisions, it’ll help you understand how others make decisions too.
So, why aren’t Glasstap’s services free? Well, it could be free, but then we wouldn’t have a team of people permanently working on new, innovative materials, unlike anything else in the market, including incredible board games, case studies, simulations and 1:1 coaching modules. We wouldn’t have a team of designers permanently working on further improvements to the service, or a team able to provide help, assistance or advice whenever you need it. Etc. etc.
Why aren’t Glasstap’s services free? Well, let’s change the question: Is a Glasstap membership worth £1.03* a day more than the free service you’re comparing it too? Hopefully, that answers the original question for you.
Rod Webb
www.glasstap.com
www.managerslibrary.com
(*Or the equivalent in your local currency.)
