Posts Tagged ‘economic values’

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OUR ECONOMIC VALUES

October 2, 2009

The morning paper today was filled with economic discussions– from the announcement of Michael Moore’s CAPITALISM: A LOVE STORY opening in theatres today; to the Business Section lead story of “Saint Nick-o-Less” and a re-evaluation of gift-giving based on need and necessity; to reports of stock markets falling and financial legal suits; to an opinion column David Brooks wrote for the New York Times which hit home to me.

Because yesterday, I received a general announcement to all card-holders of the credit card company I use-explaining the latest new interest rate increase. My immediate reaction was USURY!

So I was especially interested to learn what Brooks had to say about our economic values. I found I was nodding in agreement through the entire column, as he described our economic values slide and advocated for a restoration of those values with a “goal to make the US again a producer economy, not a consumer economy.” http://www.nytimes.com/2009/09/29/opinion/29brooks.html?_r=1

As I entered my office, my usury complaint about the credit card company, and Brooks’ column merged together. I wondered why I react negatively to a rate increase that impacts me, and yet I try to show tolerance for those in our industry that utilize a pricing policy that is equally usurious.

A small part of me, says good for them if they can continue to win business while doing that, and a larger part of me waits for them to be impacted as our customers demand more pricing transparency AND accountability and realize how much more message value they would receive if expertise pricing from vendors was reasonable.

Some meeting/event companies have taken three separate pricing strategies of the past and combined them; assessing charges for employee time, commissions from hotels, venues, and other vendors AS WELL AS a 20-40% profit made from the work of others-without whom we could not deliver integrated services. In fact, recently I heard of one example where a company does not even want to be involved in concept or production at all. Taking advantage of the recession’s impact on our business, they hope to hire the entire team from the independent free lance pool and expend no internal time or expense. Do they expect profit with no investment and recognition and industry awards, with no sweat or financial equity?

I don’t profess to be the expert that knows WHICH pricing methodology is the best; I just know I want it simple. In my past professional life, I have often spent more time discussing our pricing strategy vs. that of the competitors’ than is spent on understanding the client’s needs and brainstorming ways to meet them. So as I started CEK, I chose to establish a price for my expertise. Almost 20 years later, I still believe customers are willing to pay well for expertise they do not have internally; they just are not willing to pay a premium to get a service from us they could purchase for less dollars if they went direct.

But the real question in this discussion is: WHY are those triple-charging event companies often the ones that run into financial trouble – go into bankruptcy, or have one reorganization after another- without any change in the product or level of service?

I used to think it was weak leadership and lack of business acumen, but perhaps there is a lesson here that we can take from financial institutions. Do we need showy offices, a new car every year or two, weekly golf outings, out of sync bonuses and other perks we have grown to feel we are entitled to? Are we charging more than we are worth simply to maintain our sense of ballooning entitlement as reflected in all that we “have”? Are clients impressed with what we have or do they return to us for assistance because of what we DO for them?

This may be a topic to think more about as I expect there is not an easy answer.