Thursday 29 March 2007

Business Principles: Cheap is as Cheap Does

Just recently, I had a conversation with a couple of people we have done business with in the past.

We were speaking about the value that people perceive in our services, they being in an unrelated industry, and I was advocating that we should charge for our services according to their value.

If we do not perceive that our services have value, we won't necessarily charge enough for them. This in turn will skew the prospective client's view of our company's ability to service their needs. Too cheap, and the key clients we would love to work with won't even bother with us.

What are some of the criteria for assessing the value of our services?
  • Professional attitude of the attending company (MPECS) representatives (significant factor).
  • Quality of the job done in a timely manner (Another very significant factor).
  • Job done right the first time.
  • Preparedness: Being prepared to absorb the client's perspectives and needs relative to their own industry.
  • Internal MPECS training, and re-training efforts to stay on top of our industry.
  • Knowledge and experience in our industry.
  • Research and Development.
  • Accepting responsibility for any mistakes or errors done, apologizing for them, and making restitution for them.
It is up to us to make sure that our clients come to perceive the value in our services on their own. Our hard work and professional manner should speak for itself.

There is an important caveat when it comes to setting value for one's services:

Doing something as cheaply as possible for my own business, while expecting my clients to perceive my services at a much higher value does not work. Or, trying to sell cheap products as premium products and expecting the client to pay a premium price does not work.

Cheap is as Cheap does.

Clients, whether we realize it or not, will see that in us if the above is our attitude.

Trying to get away with running the cheapest hardware, not paying for the software we use, not taking the time to invest in our knowledge by studying and learning, trying to get high value out of a service that is not nearly worth it will eventually come through to the client and we will loose them as a client.

We would garner a reputation based on that too ... And that can be the biggest killer of a business: A bad rap.

In the long run, in my opinion, "cheap" costs more.

From systems that won't function as they are supposed to, RMA procedures for obscure system and component manufacturers that are extremely difficult to figure out or even trying to get in touch with someone who can help, lost data due to component failures, to the downtime caused by the systems and components for the client. There is a lot more to this side of "cheap".

I realize that not all of us see things this way.

But, in my experience, it costs me less in the long run to pay someone a premium for their services when I know the value of the services that I will receive. They won't be coming back a second, third, or subsequent time to fix things they broke in the first place and thus I won't be loosing money by not being productive. If they know their stuff, they will get the job done right in half the time it would take anyone else.

Or, if they come off as not having the capacity to provide good value for their services, you can bet that we will not be calling them again.

Why should I expect anything different, as far as attitudes towards service value, from my clients or prospective clients?

Philip Elder
Microsoft Small Business Specialists

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