The cheapest price phenomenon can best be described and attributed to several psychological factors that influence how people make decisions about hiring service providers, such as electricians.
- The availability heuristic: When making decisions, people tend to rely on the most readily available information, such as what they find on search engines or in advertisements. The loss leader prices on search engines make it easy for people to assume that a cheap EICR is feasible, without considering the potential long-term costs associated with remedial work.
- Anchoring bias: People may rely heavily on the first piece of information they receive when making a decision, which can lead to an anchoring bias. In this case, the low prices advertised for EICRs may set an anchor point for what people expect to pay, leading them to assume that this is a reasonable price.
- Confirmation bias: People tend to seek out information that confirms their existing beliefs or expectations. If someone believes that they can get a cheap EICR, they may ignore or dismiss information that contradicts this belief, such as warnings about the potential for excessive remedial costs.
- Overconfidence bias: People may overestimate their abilities to assess the value or quality of service. They may assume that they can spot a good deal or a competent service provider without fully understanding the complexity of the work, or the standards required for safe electrical installations.
- Psychological pricing: The use of prices that end in .99 or .95 can create the illusion of a bargain, even if the price is high. People may be more likely to choose a service provider that offers a lower price, even if the difference is only a few pence, due to the psychological impact of seeing a lower number.
Examples: –
If you take 2 x 3-bed properties on the same street, they must be the same cost. Right! No, one of them has 1 or 2 sockets a room and one centre light per room and one 6-way fuse board.
The other has 50 downlighters and 4 sockets per room, 1 house fuse board of 21 ways, plus a Garage fuse board of 6 ways, and a Garden office with another fuse board of 4 ways, the 2 are completely different and require substantially different amounts of work, in the 1st option it could be appalling, and have had so many bodged pieces of work over the years it can take longer to assess than the 2nd one if it’s in good condition and all the information is available one price does not fit all period, an EICR is an investigation, it takes what it takes to do it right.
An EICR is an Electrical Survey and report on the state of the existing electrical installation, not a race to get out the front door as fast as possible with the paperwork completed in the same 2-hour period if that is what you are getting it’s a worthless piece of paperwork.
In contrast, people may be more sceptical of requests for them to complete a similar amount of work for a low fee because they value their own time and expertise more than that of others and have no idea what it takes to do an EICR properly.
They may think there is potential for long-term cost savings associated with cutting corners or hiring cheap service providers but may be more willing to invest in a higher quality service even if it costs more in the short term.
People’s lowest-cost priority 90% of the time overrides their safety reasoning, as I have said before “The bitterness of poor quality remains long after the sweetness of a low price is forgotten.
To overcome these biases and make more informed decisions about service providers, it is important to seek out a variety of sources of information, ask questions about the work involved, and consider the long-term costs and benefits of different options.
It is also important to recognise the value of expertise and experience in complex tasks like electrical installations and to prioritise safety and quality over short-term cost savings.
Talk to our Consultants to understand your options call us on +44(0)7957-432-981 or contact us on our website www.safe-electric.com.