The tradeoffs may be deadly
One
thing an economic recession does is challenge a business owner’s belief about
pricing and competitiveness. Fear often causes people to make questionable
decisions. I’ve seen companies with a long-time history of quality work and profitability
reduced to ashes because management changed pricing models in an attempt to
survive. With thoughts of protecting jobs, they accept unprofitable work that
may throw the company into an unrecoverable tailspin. The result? Everyone in
the company, even the owners and managers, ends up on the unemployment line.
The
problem with the low-price model is that unless a company does huge volumes,
such as Wal-Mart, it may struggle to generate adequate cash flow to stay
afloat. Small businesses attempting to follow this model often die of financial
starvation.
The quality model works for
us
Admittedly,
I have a bias toward the quality model. For most of my career, I’ve worked for
companies focused on providing a superior product or service at a fair price.
My experience is that an exceptional product attains a greater level of
customer satisfaction, thus making price less of a factor. I’d rather work in
the quality category any day.
At
Brand Acceleration, a full-service marketing communications and public
relations firm, we’ve built our reputation around our marketing expertise in
economic development, architecture, engineering, and construction. From day
one, we have chosen not to attempt to be the low-cost leader. Instead, we
provide superior solutions by effectively helping our clients tell their
stories. We believe they don’t want cheap
work. They want results!
Sure,
we occasionally bump up against companies or individuals insisting they can
produce a brochure, logo, or web site cheaper than any other firm, including
Brand Acceleration. The results however, are often disastrous. The design work
may (repeat may!) be pretty, but the
required strategy, copywriting, programming, and final production are often
amateur, resulting in a watered down or failed effort. The moral to the story?
You get what you pay for.
Help me, please!
A
few years ago, I received a phone call from an economic developer who was in a
panic. She had apparently contracted a “web designer” who had promised a
beautiful new web site at a great price. She was thrilled to have found such a
deal. When she called me, she had just taken delivery of her newly-designed web
site. To her horror, it was completely devoid of copy, photos, and other
crucial content. In her ignorance, she had signed a contract for web “design,”
thinking it was an all-inclusive package. What she received was a designed
template, and not a good one at that.
When
she called me, she was in a panic, hoping we could fix her problem. The
challenge though, was that she had spent her entire budget on what was essentially
a quarter of the work needed for a fully-functional web site. She was certain
she would lose her job, and probably did.
Half-price haircuts!
A
lifelong friend of mine is a professional hair stylist. She and her co-workers
have built a reputation for excellent work. They follow the quality model. Recently,
she mentioned that one of those low-priced hair cutting chains was advertising
a special deal, “Half-Price Haircuts!”
She joked about the poor quality of such a cut, a bit sympathetic for
unsuspecting customers. I suggested she run an add stating, “We fix half-price haircuts!”
For
the Brand Acceleration team, it’s exciting to always be exploring ways to be
better at what we do, always seeking to be a better resource for our clients.
We strive to achieve a deep understanding of their audiences, becoming even
more effective at telling their stories. To that end, we recently announced two
Boards of Advisors, one for the economic development side of our business and
one for the AEC side. Their purpose is not for these experts to be on call on
behalf of our clients. Instead, it is to help us to grow our knowledge of our
selected industries, thus better serving our clients. Do those following the
low-ball, discount pricing model bring such depth to the relationship?
No
way!
I’d
love to hear from you. Feel free to share your thoughts and personal
experiences below.
Have a
great week,
Jim Walton
CEO
Brand Acceleration, Inc.
Branding // Marketing Communications // Public
Relations
Indianapolis: 317.536.6255
Charlotte: 704:230:0394
Atlanta: 404.474.7980
Fax: 317.222.1425
Cell: 317.523.7380
Brand
Acceleration is a full-service marketing communications, brand management and
public relations firm with a focus on economic development, architecture,
engineering and construction.
