Do You Nickel and Dime Your Vendors?
August 21st, 2006 by Bob Bly
Do you nickel and dime your suppliers?
Do you always or usually select the low bid for services?
Perhaps you should not, advises businessman George Newman.
“Sometimes it pays to overpay,” says George in an interview with Bottom Line Personal (9/1/06, p. 7).
“The best service professionals usually are in the greatest demand,” he says.
Newman recommends that when you find a vendor you like, you should do what you can to make him like you more than he likes his other clients.
Reason: you will get better treatment, quality, service, and turnaround.
How about you?
Do you buy business, professional, and personal services based on the low bid?
Or are you willing to pay a higher price to (a) hire the most experienced and qualified vendor, and (b) motivate them to do the absolute best they can on your project?
This entry was posted on Monday, August 21st, 2006 at 2:28 pm and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
August 21st, 2006 at 5:44 pm
Hey Bob;
I agree with George. Clients, “do not nickel and dime your talent!”
Personally, if someone starts asking for discounts, they fall into a category that I do not like to do business with.
Unless you are Wal*mart or commit to serious volume, I honestly do not think businesses should try to squeeze pennies. I do not blame them for trying. However, I let my prospects know, “I have people waiting to work with me and they pay my full rate. If you were me, who would you rather work with.”
Mike
August 21st, 2006 at 6:24 pm
Mike, I say basically the same thing: “I have more people waiting in line to hire me at my full fee than I could ever hope to handle. What’s my incentive to work for you at a cut rate?”
August 22nd, 2006 at 7:02 am
My full time work is as an investment advisor. I don’t mind people asking about fees, but if they bring it up before anything else and if they display a certain attitude, I know they will not make good long term clients and tell them so.
There’s a type of people out there that always feels they are being cheated. These prospective clients seem to live in more fear of overpaying a few cents than actually accomplishing their goals. And they’ll question everything and spoil the relationship.
August 22nd, 2006 at 10:03 am
George is absolutely right. I have clients who nickel and dime me, and others who don’t. For whom do you think I am more likely to go out of my way, bend over backwards, and generally go that extra mile, each and every time? The client who VALUES me most by not expecting me to work for peanuts, or less. Sure, I know clients have budgets and they like a good deal, and I’m sensitive to their issues. But more and more, I won’t even ACCEPT a new client if it seems they are only “bottom line” people where the money is the main factor for them. I’d rather work with a client who appreciates what I bring to the table.
Bob, I love your response: “What’s my incentive to work for you at cut rate?” I’m going to remember that one.
August 22nd, 2006 at 4:53 pm
As my colleague RM points out: the best bargain in the world is the low price of good advice.
August 22nd, 2006 at 10:35 pm
I work hard to give my clients enormous value. Most of them realize it.
I don’t mind discussing fees of course, but the discussion should focus on value. What exactly am I providing of value? Why me instead of Joe Blow down the street? What else can I do to do help, e.g. make my clients lives easier?
When a discussion concentrates on fees, I send them to Walmart!
I sometimes point out, in my exact words, “I’m not selling used cars, why are you treating me like a used car salesman?” This work well, unless you’ve been relegated to the dreaded accounts department, Global Procurement, or whatever they call those weasels 🙂
August 23rd, 2006 at 10:26 am
One of the great benefits of the Web, it seems to me, is that previously-unconnected professionals got to get together to learn how others in basically the same situation deal with the sticky situations we all face.
I have definitely gotten better at handling what I now call the “crazed bargain seekers” – ’cause I’ve learned through my own & others’ experience that there’s just no pleasing them. Happily, most of us are in situations where we can just say, “No!” (I’d hate to be a car salesperson myself — all the endless haggling!)
In important situations, I WANT to be someone’s very good client. I’ve actually found it’s more likely to be the person with the lowest price who’s trying to take advantage in some way. (They know they can’t or won’t be able to handle the work, for example.)
Rarely – if ever! – has it been the mid-to-highest-priced person/company. They’re usually the complete, bend-over-backwards to do a good job professionals!
August 24th, 2006 at 8:18 am
The adage is true: You get what you pay for. This holds true for services even more than for products. Case in point is printing services. I have experienced enormous frustrations using FedexKinkos for small print jobs. My local family-owned print center does the job right the first time, every time, at a price premium of maybe 10%. And they greet me with a smile.
I don’t expect to be squeezed on fees and I don’t expect my partners and vendors to work for pennies either. Rare is the case where the low price gives the best results.
Chris Lake
September 1st, 2006 at 2:03 pm
I agree to a point. I have several printers who charge high fees, and I have no problem asking if that’s the wholesale price. 9 times out of 10 I’ll get a small discount (or, in the last instance, 40 percent). Internet printers are generally charging for one-shot printings, but since I will bring them a lot of business, a volume “corporate” discount is in order. One printer wanted to charge me a 35 cent combining charge, when the combining was done on their website by me. When I asked about this charge, inquiring if it really did require more work on their part, they told me that it was how they make up for their R&D costs. I asked them to recode it as R&D and they elected to drop it.
Graphics Designers, on the other hand, because I have no skill that way, I pay well and promise a small bonus if the client makes a very positive comment on the art. I’ll pay it, too.
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