The Huge Cost Of Incremental Improvement

Over in Europe it’s the football (soccer) close season. This means that nearly all of the clubs are buying and selling players to improve their squads. A professional footballer can be valued at anything up to £50 million and the latest rumours about Cristiano Ronaldo suggest that he might be bought for even more than this.

One of the most protracted transfers of the summer has been that of Gareth Barry an Aston Villa player and England international to Liverpool for a fee of around £15 million. After many weeks it now seems that a deal is imminent because Aston Villa have signed a replacement Steve Sidwell from Chelsea for £5 million.

The reason that I’m writing about this on Marktd and not on a football blog is because of the way we value excellence. Steve Sidwell and Gareth Barry are both very good professional footballers but there is no way Gareth Barry is three times better than Steve Sidwell. In fact the two players are incredibly similar in terms of age, experience and ability. And yet one is worth £15 million and the other £5 million. So why is it that Barry arguably the more famous nad the slightly more experienced is worth this incredible premium?

Once we reach a certain level of performance we reach a plateau, whether this is in advertising, customer service or football. Liverpool have, for arguments sake, 10 brilliant players but lack that 11th man that will turn them into champions. At this point in their evolution good isn’t good enough. They need great. As a result they’re prepared to pay a huge premium to achieve this.

Aston Villa (a middling side) on the other hand can sell Gareth Barry for £15 million and find a replacement who is only fractionally weaker for a hugely discounted price. They can also buy another two good players and as a result elevate the level of their team as a whole.

Because in advertising we want to be great we often over look being good and spend our all our money on Gareth Barry (advertising) rather than focusing on adding three Steve Sidwell’s to the team.