On Value

This is the tale of two clients.  The names and details have been changed to protect the innocent.

The question: Which client got the better value for their money?

The show:  Both clients requested pricing for almost identical situations- a 500+ person sales conference, including AV, stage design, meeting room decor, graphics and PPT template design, special event design and decor for their awards banquet, and production support, including show caller, technical director, and production manager.  There would also be some post-meeting video editing of the footage.  Both bids were full scale meeting productions, but were based on some smaller work we’d done with each client, so this was a big inroad for us in each situation.  As such, very reasonable pricing was given out of the gate to help sweeten the deal, in order to get the larger portion of the total event expense.

Client A- The Negotiator.  Even given the initial generous pricing, the client negotiated the price even further down, until a lot of what we pitched was dropped down to at cost or below cost to get the business.  Many services were even thrown in for no-cost, including the post production editing, which is my time.  Hey, we all know this happens a lot, especially with new clients.  Once you get the business, you hope to recoup over the long-term relationship you build with the client.

They continued to question every single price in the process, citing non-realistic consumer level (think Home Depot) and internet pricing for room decor (which did not include labor, setup, delivery, etc). They changed one of their conference days from a half day to a full day, and seemed outraged that we’d charge more for labor for the AV crew.  They questioned the roughly 10% (a couple hundred bucks) in profit we sought to gain for arranging the hanging of several thousand square feet of ceiling treatments.  They tried to cut staff that we weren’t charging for anyway in hopes of further discounts.

On top of the negotiating, they also kept requesting more and more of the “free” services we were providing.  More graphics, more video, alternate edits, and “oh by the way”s galore.  We finally had to put our foot down and start line item-ing each and every addition, which inevitably meant more price negotiation on each and every item.

On site, and throughout the conference, there was even more of these add-ons, and truth be told I couldn’t help but feel like they thought they owned me for the run of the show.  We continued to line item every item, every request, and we only did what was asked of us and no more.

I also got the feeling they were looking for mistakes, cataloging every minor detail and filing it away, so that after the conference they could come back for more money off the bill.  We always strive for the perfect show, but in my 15 years in the business, I’ve only seen maybe one where absolutely nothing went wrong and this was no exception.  Additionally, a lot of equipment and crew redundancy was cut due to the budget concerns.  Unfortunately there are some clients that you can’t help but feel that they count on trying to get money back at the end of a program,  by accumulating a list of things they’re dissatisfied with and disputing the bill.  The entire conference run was one of stress and anxiety.

After the show I was tired, cranky, bitter, and feeling a little used.

Client B- Minnesota Nice.  Almost the polar opposite of Client A.  While budget conscious, there was never the feeling of constant nit-picking or chiseling.  They seemed to understand that things A) cost money, and B) we might make a profit on them.  Whenever things were added, they were always amenable to adding to the overall bill.  Above all else, they were always extremely polite, and very understanding of the time and effort that goes in to putting on a conference.  As their conference went on, I genuinely came to like the people involved- the conference committee, the executives, the attendees.  As a result, as I look back, I actually did a lot more for them than Client A.  All the little add-ons didn’t feel so bad, and I found myself wanting to help them make their conference better and better for their attendees.  They added a rush order to the post-production, and even after a week of travel I found myself wanting to work through the weekend to get it done for them so that they could get the conference materials into the hands of their folks in the field.

Due to hotel restrictions, we were forced to use the in-house AV, and unfortunately for our client, they really stunk up the house.  Tons of equipment and crew issues.  In the case of Client A, we might have been tempted to just shrug our shoulders and say, “Not our fault”, but instead we were right there in the fray, passionately advocating for our client, making sure they were dealt with fairly in the end.

Since the program, we’ve even provided some “at cost” services to help them out with the post production distribution. Why? Because they asked nicely.

After the show I was tired, but really looking forward to the next time we work with Client B.

My Take:  While we all agree that, in theory, all clients should receive the same treatment, I think we can also agree that that’s not human nature.  In the end, the two companies’ bills, minus the differences between the two shows, were probably only a few thousand dollars different.  I’d be curious to know, if they knew each other, which client thought they got the best deal- the best value for their money.  My guess is that they both would think so.  In my heart of hearts, I’d have to say that at least when it came to my time, my effort, Client B got the most value for their money, and will continue to do so as long as we have the privilege to work with them.

I am not anti-negotiation.  Around the office I have the (occasionally derogatory) nickname “Consumer Brandt” because I detest bad customer service and have no trouble telling people when I believe they’re giving it to me.  I will not hesitate to ask for fees to be waived, prices matched, or things to be thrown in.  But there is a line, and it’s largely a matter of tact, manners, and polite civility to know when that line’s been crossed.  There’s working the system, and there’s abusing the system…

As I move forward, I’m going to try and keep all this in mind as I work with our vendors.  I’d like to think to a certain extent that I do already, but it never hurts to try harder, right?

So what do you think?  Who got the better value?  Does it matter who the client is and who the vendor is?  Why?

Please join us on Thursday, Feb 16th from 12-1pm EST for a chat on this topic.  Just follow the #eventprofs hashtag on Twitter, and add the tag to your post if you want to chime in!

Enjoy Your $9.95 with a Side of Failing Business Model

Following in Bank of America’s forward, but not backward, steps-

TCF National Bank is dicking around with their checking fees. A mystery charge of $9.95 showed up on my statement this month. Apparently they sent me the notice in September on my statement, which I receive online. Yep, it was there, 3 pages deep after the canceled checks (four, by the time you get to the actual part where I could have figured out the changes). Basically, if I don’t have a minimum of 15 transactions per month, they charge a fee of $9.95.

Seems like every month I find a new reason I can’t wait to cease being your customer, TCF. I also know that I’m not alone in that desire. Complicated finances make it currently impossible for me to cut the cord completely, but for now my math is simple: I don’t make 15 transactions per month on that account, so I’ll be closing my checking account as soon as I can. I’m sure that works on somebody’s spreadsheet, probably something to do with the cost of maintaining low activity accounts. Considering the massive amounts of automation in banking these days, I can’t see how it would, though. Methinks it might have something more to do with another part of the balance sheet.

**** Edit **** I should add that after several phone calls and complaints (and being told that closing my checking account would significantly increase my costs on my other accounts), they mysteriously found a checking account between the couch cushions that did not have this minimum requirement.

On Why Cold Calling Frequently Doesn’t Work

Many discussions have centered around whether cold calling does or does not work.  I have gone on record that no matter what the source (I’ve been cold called by giants such as Best Buy and HP), it always feels a little, I don’t know, desperate.

That being said, I always try to be polite and open minded.  You never know when opportunity may come calling, and sometimes, just sometimes, it may be calling with the deal of the century.  I try to be honest about whether or not I may have a use for whatever product or service is being flogged, and this generally helps to prevent wasting the salesperson’s (or my) time.

Recently I was cold called regarding outsourcing our IT department.  We’re a lean company, and for many years I was our IT department.  When I could no longer handle it myself, we weighed the options of hiring a full time person or outsourcing.  We decided to outsource, and while it hasn’t always been the smoothest ride, all in all it’s saved more headaches than it’s caused.

Maybe a month before I was called, we’d just re-upped with our current provider for another two years.  I politely explained this to the caller, but said that if he sent me some information on his company I’d be happy to check them out and keep them in mind when it came time to reconsider in about a year and a half.  Emails were exchanged and the conversation ended.

A couple of weeks later, I received the following email:

HI Brandt,

I spoke with you a couple weeks ago and sent an email about my company. I would very much like to come and show you how we are superior to (*current provider*) in a variety of ways. Please allow me 15 minutes to demonstrate what we do and how we can reduce your costs.

My job is to simply set appointments and based on our conversation I know that we are an ideal fit for your company. A couple years is too long to wait before comparing managed IT service. I promise you that are service is priced below all competitors, we offer unique perks that others do not.

Let me know when you would be available for me to stop in.

There were no attachments.

So, to be clear, I explained that I would not be evaluating new companies for at least a year and half and requested information about his company.  Instead, I received NO information and an immediate meeting request- the exact opposite.  I’m afraid my response was less than polite this time.

And so I respectfully submit the following thoughts and questions:

• The question isn’t whether or not cold calling works, but rather whether or not your “post call” strategy works.
• What do you do when you hang up the phone?
• Why did it take this person over a week to follow up?
• Why did they ignore my timeline and push their own?
• Why didn’t they send the information the second they got off the phone with a polite “Thanks for your time” email, and then put a note in their calendar to call a year and a half from now?
• Was I, as the potential customer, wrong to be annoyed or should I adopt a more “He’s just doing his job” mentality?

As always, comments and criticisms are welcome below.

-Brandt

********* Update ************

Moments after posting this, the salesperson in question responded to my email.  For context, here was my (admittedly less than polite) initial response:

Hi (*Blah Blah Blah*),

While I understand you are just doing your job (“to simply set appointments”), I have a very low tolerance for companies and people that represent those companies that do not listen to their (in my case, potential) customers.

I explained to you why we won’t be needing your services in the near future (we’re under contract for the next two years) and asked you to just send me some information on your company.

Instead, you’ve sent me no information and requested an immediate meeting, which is the exact opposite of what I asked.

Had you done what I asked, I would have looked at your information, filed it, and (if warranted) seriously considered your company when we do start looking in a year and a half or so.

Instead, you’ve just annoyed a potential customer.  Your company may or may not come up when we get to that point. Please do not contact me in the meantime.

Thanks,

Brandt

Despite my “Please do not contact me in the meantime”, here was his response:

Brandt,

I would guess the information that you would like is pricing, right. I do not have that, nor would I send an email with it. That would not benefit me or my company. It would only benefit your firm. Please understand that and the fact that I am only paid to set appointments so that we can provide pricing(far less expensive than your current vendor). I doubt that I have really annoyed you. See attachment and call us when you want an exceptional managed IT service.

Best,
(*Blah Blah Blah*)

So many things wrong with that response…

Actually, no, Mr. Blah Blah Blah.  I was referring to maybe a fact sheet about what services your company provides, or perhaps a case study, or something.  The “attachment” mentioned was a PDF of some of the awards the company had won.

And if you hadn’t “really” annoyed me before, you have now.