by: Geoff Ficke
The Old Adage “You Get What You Pay For” Is Especially Important to Service Providers in Today’s Economy
The 19th century British essayist John Ruskin once presciently stated, “There is scarcely a thing in the world that some man cannot make a little worse, and sell a little more cheaply. The person who buys on price alone is this man’s lawful prey”.
Great wordsmith that he was, Mr. Ruskin’s stylish prose has been re-engineered in more modern form to become the universal adage “You get what you pay for”.
People universally understand this to be true, even if they do not always practice the rule in their own dealings.
I earn my living as a Consumer Product Marketing Consultant. My firm sells a full menu of services. We use a variety of associated independent vendors who sell their services in specific areas to our clients. Patent Attorneys, Product Development Engineers, Graphic Artists, Chemists, Nutritionists, Manufacturers, Display Designers, Prototype Builders, Pattern Makers, Lithographers, Packaging Engineers and dozens of other specialists collaborate with us to provide a turn-key Product Development service.
My job is to save clients time, mistakes and money. We are good and very successful, having been doing this type of work for over 40 years. The specialists we involve in each project are hand chosen for their expertise, past successes and the value they bring to our clients. I have never chosen a vendor because they are cheapest, but because they offer an excellent service at a fair price.
It is true that economic times are difficult. Many people have been neutralized by the economic chaos they see occurring around them. Some fear plunging into a new business venture until things calm down. Others use the uncertainty as an excuse for not moving ahead at all. Some attempt to leverage the pullback to negotiate reductions in fees, costs and development work provided by skilled professionals that may have suffered a loss of work over the past three years.
Here is a caution. It is very unwise to compete for project work by selling service at discounted prices or fees. There are still plenty of qualified clients seeking the best possible outcomes for their projects. They understand that it is silly to try to cut corners on quality and creativity to save a bit of money when they really want the best possible product to sell to consumers. If you discount your fees, and the perceived value of your service, you will only diminish your reputation for top quality work now, and when the economy rebounds.
We review hundreds of products and projects each year. This has been consistent during the recession, as it was before. We have never had to discount a fee to secure a client project. Once we describe our work template, experience and the unique concierge one-stop Product Development service we provide it is unnecessary to barter away a fair remuneration for the valuable work product we produce and our clients ultimately enjoy.
Several months ago we were approached by a pediatric nurse with an interesting Wellness Product. She had discovered an opportunity niche in her work with small children. The Juvenile Product she had conceived possessed all of the elements necessary to achieve commercial success. We walked the nurse though each step necessary to convert her concept to a market ready Consumer Product.
As we discussed Gantt Chart work items and the timeline involved we quoted fee ranges for each component. As the meeting concluded, the nurse asked if we would defer fees. We advised why we could not. Our suggestion was that she interview at least three other firms, listen to their ideas for the project and negotiate fees with them. If she wanted to go with another firm we would wish her good luck. If not, we would love to work with her to make the product real.
This week she called and asked if we had space available for her project. She advised that she had spent a good bit of time interviewing other firms and always came back to the fact that we offered the best combination of experience, convenience, creativity and value. The nurse was also impressed that we did not press or hard-sell her, and actually suggested that she speak with competitors. We have a new client. She has a good deal. A good deal is one where both parties receive benefits.
Whether you are an independent contractor, a real estate agent, engineer, designer, an artisan or any of hundreds of other occupations where you sell your service we encourage you to ask a fair compensation for your professional experience. If you are good at what you do you should be properly remunerated.
Discounting payment of fees is an indicator of weakness. As John Ruskin said, “The person who buys on price alone is the “seller’s lawful prey”. Sell quality work and be paid accordingly. Your work is worth it.
Geoff Ficke has been a serial entrepreneur for almost 50 years. As a small boy, earning his spending money doing odd jobs in the neighborhood, he learned the value of selling himself, offering service and value for money.
After putting himself through the University of Kentucky (B.A. Broadcast Journalism, 1969) and serving in the United States Marine Corp, Mr. Ficke commenced a career in the cosmetic industry. After rising to National Sales Manager for Vidal Sassoon Hair Care at age 28, he then launched a number of ventures, including Rubigo Cosmetics, Parfums Pierre Wulff Paris, Le Bain Couture and Fashion Fragrance.
Geoff Ficke and his consulting firm, Duquesa Marketing, (www.duquesamarketing.com) has assisted businesses large and small, domestic and international, entrepreneurs, inventors and students in new product development, capital formation, licensing, marketing, sales and business plans and successful implementation of his customized strategies. He is a Senior Fellow at the Page Center for Entrepreneurial Studies, Business School, Miami University, Oxford, Ohio.