Don’t be influenced by the competitor who gives away work to keep the business.
We’ve seen it many times before, the economy gets tight and low-ball prices disrupt the normal bidding process. Struggling companies will sometimes price jobs below competitive levels, sacrificing profitability in an effort to keep the work. The concept just doesn’t play out. In the end, the customer usually gets less than they need, the company that got the work goes deeper in the hole and the entire community gets a bit of a black eye.
While some customers will fall into the under-priced trap, most know that they have a very good chance of getting burned if they move to an unknown vendor with unusually low pricing. As a well-managed business, you know what your profit requirements are, and you know the needs of your customers. Holding to fair prices and delivering the right value is the more sensible approach.
No doubt your customers are carefully watching the bottom-line. Everyone is. But while they are careful not to overpay for support, they really can’t afford the additional problems that come from accepting below-market pricing. Communicate with your customers. Be prepared to fully explain your fee structure and elaborate on the value your company can provide. Partner with your customers to help them address their challenges.
At SGIA, we talk a lot about sustainability. Many think sustainability is only about environmental issues. But protecting the environment is only part of it. A sustainable business approach addresses the needs of people, planet and profits. You can’t support employees or address environmental concerns without profits. In a sustainable business model, profitability is the engine.
Your customers know that when the economy is tight, mistakes get magnified. They want vendors they can count on; vendors who will add value and help maximize opportunities. They need vendors who can respond accurately and quickly as opportunities arise and the marketplace shifts.
As we work through the challenges of 2009, there will be increased competition; some that will defy reason. Don’t let this deter you from a plan of sustainability and quality. Show your customers that value is in the results.
Be strong, be focused and be positive.
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