Discover your free Construction Marketing Ideas Email Newsletter

Thursday, September 06, 2012

Buying or selling: The decision-maker's perspective

Today I spent several hours on telephone conference call meetings.  We were discussing choices regarding the websites for our imminent U.S. market rebuilding.  Much of the time, we focused on a well-crafted and designed proposal from a service contractor who proposed to deliver the new websites, in significantly enhanced format to our current sites, at a price approaching $10,000.

I didn't have a problem with the quote, the price, or the website developer's expertise, talents and relationship with one of the company's key contractors.  But equally I knew that our entire U.S. project depends on keeping costs rock-bottom low.  By the end of the afternoon, I had confirmed that we indeed have the legal right to "clone" existing sites (developed by the same organization seeking the $10,000 contract) for a price tag in the hundreds, rather than thousands, of dollars.

In fairness, we'll go back to the contractor and ask for a re-quote based on the simple "clone" model -- no extras, no goodies, no bells and whistles.  I'll probably be willing to pay more than the rock-bottom copy-cat service price for the work, and I want to allow our contractor to maintain good relationships with the service provider.

Meanwhile, almost coincidentally, I received a strange mass market email proposal from another service provider, who purports to have a list of more than 100,000 names of contractors and others, and who also designs websites and the like.  It turns out that the contractor who works with us closely -- and recommended the $10,000 contractor -- has had some previous business dealings with the other service provider, who I know from earlier communications.  Neither has much love lost for each other.

In this conversation, the competing service provider suggested an elegant and inexpensive solution to our website building process.  We could develop a scalable system with original designs and the like and all the bells and whistles, for a base fee of $1,500 plus $300 per additional website.  The system would be relatively easy to administer.  Much less expensive, of course.

But could I accept his proposal?  I need to live and respect the other people in this story.  The individual closest to me and my business doesn't have fond feelings for the service provider (and the feelings are reciprocated.)  

Of course, I can take this person's suggestion and then prepare a RFQ, and post it publicly on an international service like  Or I can use my existing contractor who helped produce clones of the original site for a fee of about $200.00 each.  

Decisions.  Decisions.  Clearly, as well, the choices I'm making here are not shaped entirely by the good will and initiative of the company's employees or contractors, my own experience, and alternative service providers' recommendations.  Price is a factor.  If the original $10,000 proposal had been more like $3,000, I might have said:  "Let's do it -- it is more expensive (perhaps 50 per cent more expensive) than the lowest cost alternative; and may not even be the best choice technologically . . .but we know and respect the supplier and wish for a seamless experience."

But $3,000 is not $10,000 -- and the possibility of achieving a higher quality result, at least in theory, for $2,000 or even $1,500 remains in place if we are prepared to do some research, take some risk of failure or a bad selection decision, and possibly the need to ruffle some feathers.

I share these perspectives because they show the challenge of virtually any marketing or selling initiative.  You can't just "rely on relationships" and you may in fact be setting a fair price for your services (I don't doubt that for many businesses, the $10,000 proposed fee is quite reasonable).  You may be frustrated because you can't talk directly with the decision-maker or, even more frustrated because, when you speak with the decision-maker, he considers the relationships with staff, contractors, and your reputation -- and you can't overcome this baggage.  You may be in a situation where you provide enough information to cause the potential customer to ditch the original proposal, and take your information to achieve lower costs -- with work done by third parties.  (In other words, you've acted as a totally unpaid consultant.)

I don't think I had intentions of behaving unethically or playing people off against each other this afternoon.  In fact I felt quite stressed by the conflicts and would have liked to find a simpler solution.  Nevertheless, when I am spending company money, I want to be sure we are receiving the best value -- and at the end of the day, I felt that "none of the above" applied to the people who were trying to sell me their services.  We'll get the job done, but not the way the marketing script-writers had hoped.

No comments: