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What is Value?

We all love a bargain, but value does not necessarily mean cheap.

By Jeremy Ryland

@expertgourmand


Value – what is value?


What is good value? A 25% discount on a $100 bottle of wine? A $2 cup of coffee? Why is a $50 steak in a premium restaurant seen as better value than a $25 steak in a pub or chain restaurant?


Why do some people see a Lexus being better value than a Toyota? Why do we buy Apple, Nike, BMW, Louis Vuitton etc. when there are cheaper alternatives that function just as well – if not better! 


Brands and Image add value. We will pay more for a quality brand due to perceived quality, self-esteem and other factors. Even price can add value – a product sold at a premium in David Jones can be seen as better quality than the same product at K-Mart. And a Rolex for $25 must be a fake.


Value means different things to different people. And value does not necessarily mean cheap. You can have a poor value sandwich and good value expensive dinner! Everyone has a different perception of value, depending on their needs and budget. 


The value of a good meal includes the overall experience, including quality, quantity, presentation, convenience, décor, atmosphere and service, divided by the price.


“Price is what you pay, Value is what you get.”  (Warren Buffett)


Value is a complex balance between something we desire and the cost. It can be expressed in this Value Equation.


The price may not just be in monetary terms – it can include the cost in physical and emotional terms.


We hear a lot at the moment, especially in the lead up to the election, that people are struggling with high costs. High utility, public transport and food costs are hurting. These days, people are much more cost conscious and are seeking “value”. Discounts are normal and web sites like Groupon and EatClub offer 50% off deals and more. We all love a bargain.


However, discounting is dangerous. Everyone does it. Whilst discounting may work for some high volume retailers like supermarkets, where unit sales are high and overheads are proportionally low, it is a slow death for food service operations. Coupons, discounting etc. simply resets the base price points. 


Hospitality is more than just a product – it is a service – a form of entertainment. It’s about people and sharing – not just products. Setting price points is important and discounting should be avoided.


Yet bargain hunting has become a sport and we rarely pay the full “ticket” price for anything. However, most people will also spend a little more on something we “value”. Something that is special to us. In these tough economic times, consumers are seeking certainty, familiarity and trusted brands they can relate to.


The product we buy is a reflection of ourselves. It is part of our self-esteem. We buy things to make us feel good and to project our image. 


The important thing from a restaurateur’s point of view is to be able to provide that little bit more – that extra “value” that people will pay more for and come again to experience.


So what is a good value meal?


There are obviously a whole lot of factors, many of which vary from person to person. The key ones are obviously good quality food, prepared and cooked well. And great service. A really good meal can be ruined by poor service, whereas a simple meal can be improved with good service. 


And then there are all the little things. Things that turn us off, like dirty toilets, greasy tables, lack of water, tables too close, waiting for the bill etc; and there are lots of little things that make a positive difference, namely attention to detail and small touches like complimentary sparkling water, petite fours with coffee and so on. 


At one local restaurant I know (and love) the chef/owner comes out to greet each and every customer and will share a complimentary dessert wine with guests at the end of the meal. Simple but highly effective and “value adding”.


We buy things to satisfy dreams. If your guests leave feeling that they have had a great time and got good value – they will tell others and come back.


We may have a love of the casual – but we still have a need for quality. Fancy pretentious dining may be on the way out – but quality innovative casual dining is still in. We need to encourage innovation and experimentation and reduce the risk of mediocrity and homogeneity.


By definition, most restaurants and cafes are mediocre – they sit in the middle of the “normal distribution curve”.


Don’t just be mediocre!!The best value food is simple, fresh, high quality and well prepared, served with a smile, genuine passion and good hospitality. Hospitality is a relationship, making someone welcome, comfortable, feeling special and inviting someone back. Good Value is generous and genuine Hospitality.


“Nowadays people know the price of everything and the value of nothing.” (Oscar Wilde 1890)