Why should you value a premium, professional, marketing service?
Chris J Reed
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Movie star Harrison Ford said in 2010 when asked if he would ever drop his fee “This is my job, I don’t have another job. This is my craft that I have spent my whole life working at. I want to get paid for doing it otherwise I am not being responsible and I’m not valuing what I do for a living. When I came into this business I didn’t know the names of movie studios. When I was under contract at Columbia Pictures they paid me $150 a week. I only found that I was valued when I was valued. That’s the way business is”.
Next time you criticise an actor for being paid such large sums you may wish to think about this. However the sentiment runs true across all services; from acting to management consulting, financial services to advertising, legal to my LinkedIn marketing consultancy.
Being an entrepreneur really teaches you the value of a service and all about pricing it. I have Asia Pacific, Australia/New Zealand, European and American clients as my business is focused on enhancing your LinkedIn profile to achieve you goals which is a global need. My service is premium as it’s so personalised and as the results make a real difference to a person and a business.
There is a real dilemma for professional service companies in like mine in Singapore and across Asia Pacific. This is between what someone is prepared to pay for and what someone knows they need but does not value enough and is therefore not prepared to pay the right amount for it. They think they can do it themselves or get someone junior to do it or give it an existing agency. A bit like employing another actor when you could get Harrison Ford.
I have heard many stories from every kind of agency and B2B company here in Singapore, from marketing to training, architecture to stakeholder engagement, who have been exasperated by local clients and potential clients trying to pay what they did 5-10 years ago and or just not valuing the service for what it is really worth and trying to buy it on the cheap.
Singaporean companies of course know that there is always a local firm who will do it for virtually nothing just to get the business. However you do get what you pay for in these kind of services as many people have found out. You may save in the short term but not in the medium or long term, you will end up paying more and the quality of work is often sub-standard.
If you look at various online tender systems in Singapore and across Asia Pacific for example this can be the worst example. The number of stories I have heard of bids going in at hundreds of dollars when everyone else is pitching at tens of thousands is just too many to find funny.
These lower bids are always from local operators. They clearly have no value for their own service as they can not possibly be making any profit from these bids so why do they do it? Winning work for the sake of it if it loses you money every time is the road to ruin.
All they do is bring down everyone else or try to and disrupt the process unfairly. I have even heard stories of these unrealistically lower bidders then complaining when they have lost. They do this on the basis that they should have been awarded the bid based purely on price not on experience, expertise and the ability to deliver. Incredible.
The people who issued the tender then has to go through a ridiculous process of justifying why they wouldn’t pay hundreds of dollars for a job which clearly needed a service with a value of tens of thousands or even hundreds of thousands of dollars in time, experience, expertise and professional fees alone.
What a waste of everyone’s time. However this trick does work sometimes and they get the work. The work ends up being terrible and then the tender ends up getting issued again having wasted months on someone who didn’t know what they were doing. All because people want to buy a low priced service if they can without looking at the substance, the experience and whether people can actually deliver what the client wants at that price.
So why do people always try and pay as little as possible and still expect the same premium level service? It’s like paying for a Ferrari or a Louis Vuitton bag and the wheels not being on or the straps not being on. You do get what you pay for in every aspect of life from restaurants to professional services, especially in Singapore.
The price of a premium personalised service will find a home in a market or section of a market that could be from different countries and situated in different regions of the world.
The beauty of LinkedIn being truly global is that there is a massive market globally for our offering as well as amongst a niche community in Singapore. Not everyone has that luxury.
Even in Singapore and other Asian countries there will always be regional clients who can stretch budgets over several countries to justify the cost. There will also be more worldly clients who are happy to pay the price because they know that you get what you pay for and if you “pay peanuts you tend to get monkeys” as the saying goes.
There are also other premium priced service consultancies, companies and agencies who will pay a premium price because they also know that you get what you pay in the service sector. This is exactly what they offer too so why would they scrimp on employing a professional service provider for themselves?
If you want a premium, tailored personalized service with direct results that takes care, thought, longevity and a more strategic thought through approach then that needs to be paid for. The best lawyers, accountants, management consultants, trainers etc cost real money. Why shouldn’t marketing agencies and consultancies?
One of McKinsey’s marketing points and brand values is that they are deliberately higher than anyone else. Right from the start they positioned themselves in this way. The quality and value of their service is higher and therefore you should pay higher fees.
If you don’t like it then you can always buy a substandard service for less money but it won’t be McKinsey you’ve employed. When it all goes wrong you can’t say it was McKinsey who advised you, you would have to explain why you picked a more inferior brand based more on cheapness of price than quality of service and reputation.
If local firms want to work for nothing that’s up to them. However the reputation of Singapore as a country where many companies will not value a service correctly will ultimately damage the economy and the firms here, both local and MNC.
Experienced talent costs, expertise costs. These can’t be employed on the cheap. If you think it can you will reap what you sow, pay your lower money and take your chances as they say. Don’t blame anyone but yourself when it all goes wrong and your expectations are not matched with the service.
There is no winner in the low cost game in professional services. There is a client who thinks that they are getting something for virtually nothing whereas they are really just forcing their countrymen into working for nothing, getting less experienced people on their work who can afford to spend less time on the client and forcing the service provider into cutting their own costs to compete. That way lies madness.
As Harrison Ford said “This is my job, I don’t have another job. This is my craft that I have spent my whole life working at. I want to get paid for doing it otherwise I’m not valuing what I do for a living”.
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9 年Great points! Thx Chris
Career advisor
9 年(Continue...) Over the years, I charged different rates for different clients. For new market entrants into China(via referrals), I charged full rates. For some int'l networks, I gave some discounts depending on factors like: reputation, their internal policies, connections with their senior leaders/HRs, availability of talents, etc. While we cannot change others' opinions and expectations towards service providers, we can adjust our strategies and charges according to the factors within our control. At the end of the day, we need to prove our market reputation, credibility, USPs before our charges are acceptable by our clients(market). For me, I choose only to work with those who share some common values towards talents and recruitment. Rate is not even an issue for me to decide which companies I want to put my name behind my endorsement.
Career advisor
9 年The situation in China is same same. Worse for the "red sea" recruitment industry serving the communication industry when more and more international network are staffing up their internal recruitment function and cutting budget to engage external search firms. Just to share my own experience. I joined in the high time in mid-2008 just before the global economic crisis hit a few months later. My first "hard reality" came from an int'l agency network when the junior HR drove hard bargain at the candidate offer stage to demand a real low commission rate and later on further demanded no minimum fee per assignment. I had to bite the bullet as that was my first "foot in the door" strategy with a well-known network and I needed a good client name to build my reputation and credential in that specific communication sector. Over the next 2 years plus, I helped this network hired about 15 (included high profile leaders) across all functions. My first "break through" came when one int'l creative agency HR wanted to hire talents in Guangzhou. Unlike Shanghai and Beijing, Guangzhou has challenges attracting top talents and thus the HR was desperate. I demanded a phone call debrief with the agency head and somehow I impressed them with my knowledge of their challenges and the market. I demanded our full rate-card rate and the agency eventually agreed. I went on to made placements for that agency and our relationship extended to nationwide, and we became their priority search firm. The HRD even turned to me for consultation on HR matters from time to time.
Executive and Personal Coach | Leadership Development
9 年Great article, Chris. I am reminded of similar experiences while an architect here in the States. The worst thing I ever heard of was something to the effect of......if you, Mr Architect, take this commission at this lower price, or add in this additional service at no cost, we'll throw you the next project (where it was believed we'd make up for the bone we threw.) The reality was the bone rarely got thrown back. Worse yet, and to your point, we agreed to it in the first place rather than understand our value. In our current work we have begun to understand why this occurs: if we all were able to understand and experience our intrinsic worth, which is our capability to creatively transform, these situations simply wouldn't occur. We even go as far as to declare that most social ills would quietly go away. But until such time that is realized we likely will continue to play the game. Be well, Steve
I help and inspire people around the world through professional training in Contact Centers, Customer Service & Customer Experience
9 年Hi Chris - yes a relevant article and most especially in Singapore where asking for and receiving discounts is more about playing and winning at some unspoken game rathr than truly looking out for company welfare and well being. You simply can't buy professional services the same way you buy t shirts at Giordanos The Public Sector really stands out here. Though tenders are supposed to be put online what the stakeholders do is call up a professional services company like my own and ask for a full proposal including methodology and outline. Then they take our proposal and use it as their official Tender document online and then choose (most often) the chea one man show vs a qualified provider. We've actually stopped providing proposals to the Public Sector without an official Tender or ITQ document. The upside is that when we are selected the client is usually blown away in a good way because they had so many bad experiences of over promise and under deliver! While it goes against my natural grain I sometimes have to sell not based on what we can do for you but what we promise we won't do to you. Now that's really a sad state of affairs. Lastly a big issue lies with the low calibre of the folks who are asked to find suitable vendor candidates. In many cases they can't even articulate what they want or what the objectives for the engagement are - just sendua your price. And you are lucky if you have any professional or courteous follow up explaining if you have it have not been chosen. The chalenges go on and on and in my 16 years of entrepreneurial work in Singapore it seems to be worsening and not improving. My advice? Love and care for your loyal clients and branch out overseas. It's not just that the Singapore market is small - it is that the appreciation and understanding of the value proposition can be limited in a market where discounts and freebies matter more than the work.