Tom Stimson, MBA, CTS, is president of Stimson Group LLC, a Dallas-based management consulting firm specializing in strategy, process improvement, and market research for the Audiovisual Industry. Tom is a Past-President of InfoComm International and a current member of InfoComm’s Adjunct Faculty.
My old boss has a saying, “We are in business for fun and profit. If we are not making a profit it’s not any fun.” All projects start out fun and profitable. What happens next is really up to us.
In my consulting practice I encounter some very creative ways that my clients undermine revenue opportunities by placing unreasonable expectations upon the project. When a new job comes our way, we often project our own image of what the customer wants and how they will revere our work. The project therefore must be completed with the best materials and any obstacle to high quality work should be removed or dismissed. Customers that refuse to make the “right” choices get labeled as “cheap” or “Not someone we want to do business with.”
“Customers should come to us only if they want to do things right,” is the battle cry of control freaks everywhere – and our industry attracts control freaks like flies to roadkill. The fact is, projects never go right if we use idealistic standards. When customers come to us with a $5,000 budget for something that should cost $10,000, it is not a reflection on what we want to charge. They only have $5,000. We arbitrarily chose a $10,000 solution.
“That’s what it will take to do it right. We don’t want to do it wrong do we?”
Sigh. AV people can be such snobs. When it comes to technology, all that really matters is whether the customer is happy with the outcome for the price paid. How you prefer to do it is a choice. It’s only the right choice if the customer agrees that it is.
“We don’t want to be associated with a project that won’t look good!”
Big, snobby, snobs. Low budgets do not have to mean schlock work. The implication that the customer is asking for a low quality job is a bit insulting. What they are asking for is a $5,000 solution. Yours may or may not meet their needs.
“We have higher standards than other companies.”
Uh, well good for you. Apparently those standards don’t include a willingness to research a $5,000 solution for a willing customer. Some customers are price-shoppers that research their options then look for the lowest cost. Most of us don’t want to deal with price-shoppers, and that’s OK. Other customers have a budget. That budget may not be realistic, but it’s their budget. They deserve respect for having one. We can educate them about what that budget will buy, and what a higher budget might afford them, but we can’t look down our noses at the project.
If you are a true high standards company with top tier solutions, then that $5,000 budget might not go very far. I suspect that the project would still be profitable, but it may not meet the customer’s needs. The guys down the street may have a more cost-effective option: less expensive products or labor, lower overhead, or perhaps they are just more open to using off-brand products or lower technical specifications. If that solution will make the customer happy, then that supplier deserves to win the business.
“They won’t be happy with the outcome.”
Sour grapes. Unless you take the time to demonstrate the difference in the solutions to the customer to assess what meets their expectations, then you are applying your personal prejudices. Bottom line, if you are going to be a snob then you are just going to have to work harder at proving your point.
Many of my clients will read this and think “Gee, Tom’s talking about us.” Unfortunately I am talking about a LOT of companies. I run into this all the time and I can assure you, snobbery keeps firms from growing, alienates potential customers, and drives down profits. I find it in Systems Integration and Live Events, and I see it as a consumer. Snobbery manifests itself in project design, product choices, staffing levels, and pricing. When you let your technical team drive the solution, it is almost always more expensive. If you let the same team evaluate potential projects and customers before we do business with them, they will reject most.
How do you change your team’s (and your) expectations? Start with the numbers and learn where profit comes from. I doubt you have a line on the P&L called “We are better surcharge.” We all make money by delivering what we promised for less than what it costs us to do it. What we need to understand is that there is potential profit everywhere. Treat your customer with respect and the project with reverence and you will find that there is more acceptable business out there than you thought.