The Cost Of A Great Idea . . . By Director Wayne Hall

October 31, 2008

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Big events bring out big responses, and there is nothing like a global economic crisis to trigger a climate of “review” and “re-evaluation” within business. For many, it’s time to “baton down the hatches” - for a few, it’s a time of opportunity.

It would seem, if my recent discussions with prospective clients are any indication, that a growing percentage of decision-makers are withdrawing from entertaining ideas and concepts which could bring value to their business in the medium to long term; unfortunately (but understandably) these ideas are being dismissed as “potential avoidable costs” in the short term.

It’s a challenging environment for the service provider of a product which is laden with “intangible” components, because as discussion becomes stifled, so does the opportunity to differentiate one’s services and build relationships which have depth. “We just want the cost of your service, thanks . . . nothing more at this stage”

The irony here is that whilst meaningful relationships can be difficult to forge during a tough economic climate, it is precisely these types of relationships that are the key to sustaining and building business with established clients during these more difficult times.

So how do we make our way through this more demanding market?

There is no one solution, of course, but a key ingredient for surviving more cost-conscious times would seem to be (in our experience anyway) a commitment to establishing & maintaining relationships, both as a seller and a buyer. Two recent experiences (within 24 hours of one another, actually) brought this sharply into focus for me.

The first involved a prospective client who set a tone which promoted the exchange of ideas from the outset . . . “this is what we have in mind, and we’ve invited you here because we’d like to discuss ways of achieving it . . .”

Implicit in this scenario is the recognition that as a service provider, you are there because you know what you are talking about. Aside from the obvious “feel-good” factor that comes with this type of recognition, this approach by the prospective buyer is a very clever and efficient way of getting total buy-in from the seller (more about his later).

I must say, I left the meeting totally “fired up” . . . sold on the need to do my utmost to help this party deliver the best possible outcome, and thankful for the opportunity of explaining how we would go about it. They’d won me . . .

The second prospect exchange was a total contrast . . . “We’d like a quote for a music strategy . . . just send through the figures . . . and no, we don’t have time to discuss the matter . . .”

Great! No opportunity was provided to get a feel for the customer or staff profile (the audience) in order to determine the appropriate music strategy for their store environment, and likewise there was no interest in exploring the implications of different player solutions (“hands-on” CD solutions versus “hands-off” PC based solutions). No opportunity to appreciate the challenges or offer ideas . . . nothing . . .

As the old colloquialism goes, you know you are on a “hiding to nothing” when you engage with this type of prospect. Even if you “win” the client, you get the sinking feeling that not only will they be problematic, but they will be gone once a better cost option comes their way.

It’s a process which is inefficient and unfulfilling – and there lies the rub . . .

I have no doubt that the first of the parties above will deliver a “value-effective” solution. Making the time to discuss the requirements upfront means that not only will resources be allocated effectively, the supplier will also have a much greater interest in adding value wherever they can. We talk so much about the need for the seller to “engage” the buyer with this or that technique that we often forget that the opposite can equally be true - a clever buyer can use techniques to engage the seller in such a way as to perform at the top of their game throughout the relationship.

The second party, on the other hand, will spend the next decade chopping and changing from one (poor) solution to the next, extracting minimum value from their strategy (and from a disinterested service provider), and incurring a bunch of indirect costs though lost productivity and maintenance issues.

What can we take out of this? Well firstly, that the current climate is likely to further polarize attitudes - it will be very apparent even earlier than usual in the sales process whether a prospect is totally absorbed in cost-cutting measures or not. I also suspect that more and more parties will be tempted to take the cost-driven approach to strategies, whether as a seller or buyer. It’s a “safe”, defendable position when times are tough.

But whether we are buyers or sellers of services, we probably should:
- Ensure we have processes which identify the nature of our prospect so that we can respond accordingly - efficient, unemotional quotation procedures for cost driven clients, and idea-rich approaches for those looking for strategic solutions
- Explore ways through which we an convince cost-conscious parties to consider more strategic solutions
- Make sure our relationships are secure with our current clients and that we are meeting - preferably exceeding - their expectations

Ironically, it is during cost cutting times that great ideas will win the day….


Seemed Like A Good Idea At The Time . . .

I have to mention this one. Maybe you may have seen them, the hand dryers with the small video presentation that starts up when you use them, complete with an audio presentation. They are making their way into “loos” everywhere.

Picture this, cave-like acoustics . . . three hand-dryers blowing away noisily . . . and three out-of-synch audio presentations - an audio mish-mash which could be part of the hand-book of any torturer around the globe.

No doubt it all seemed fine when played on a test-bench in a quiet room . . .


Wayne Hall
Director

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