On Memorial Day weekend in 2000, Patti and I went on a weekend trip to Charlotte, NC to watch the Coca Cola 600 (Nascar). Thanks to some airline problems, we arrived in Charlotte without our luggage.

Because we need some clothes for the next day and it was late in the evening, we went to the only place open, a Wal-Mart. I remember thinking at the time of purchase how nice the clothes looked and what a cheap price I had paid for the outfit (a golf shirt and khaki pants).

The outfit did not last me through Labor Day. After two washings the shirt was faded and frayed and the pants had holes worn in them. So in the end I got a good looking outfit for $25 that lasted 2 months.

I could of bought a nice Ashworth Shirt and a pair of Dockers Khaki Pants for $125. These items typically last me about 3 years. To emphasize my point, let’s assume that they only last 2 years.

So for the Wal-Mart outfit, my cost was $12.50/month. For the more expensive outfit, my cost is $5.22/month. Even if I the Wal-Mart outfit last 3 months, my cost is still 45% more than the expensive outfit.

I sometimes have a customer call me to complain about our hourly rate. They say they can get a cheaper rate elsewhere (which no doubt, they can). They will pay $50/hour to some guy working out of his garage who will take 1000 hours to complete a job. Often, even if this completes the job, he will not be able to be found in 6 months time. 

Are they getting a better value when we will take only 400 hours to complete the job (and yes – we will comlete the job) and will be around for any service, upgrade, or other related issues that may come up in the future?