When “The price is not Right”

I think mots of us here in CONUS know of the old TV show hosted by Bob Barker called the Price is Right.  The show had many opportunities for contestants to bid on items.  The closest person to each item price won.  At the end of the game the 2 contestants that won the total amount of money during their game play competed for 2 large packages.  Again, they were told to bid on the packages, which included trips, cars and various other high priced item.  The closest bidder to the total package amount without going over, won their package.  If either contestant’s bid was within $100 of their package they won both packages.

Our industry is defaulting from this same premise.  We are losing from overbidding as well as under bidding.  Over zealous companies are killing the client base with outrageous hourly and daily rates.  Client’s experience sticker shock and resort to two choices,  write off protection or start shopping.  The next group is killing the industry.  These are the Catfish [bottom feeders] that are doing jobs way below the business pricing model.  When you have guys sending emails out to do EP gigs way below the market pricing model it kills the business.  Many company owners can relate to the conversation that they have had with a client who says, “We only paid “X” amount with the last company we used.”  You natural instinct is to say, “Then you need to call them back.”  As tempting as you want to, you can not.  Deep down inside you know why the previous company isn’t there.  When you hire a $20 dollar guy, you get what you pay for.  For the sake of this blog, $20 an hour was the going rate to pay a specialist in 2001!

New clients are vulnerable and can be taken advantage of by predatory specialists and companies.  So that you know, I will have a conversation with and explain to them the pitfalls of the industry Price is wrong problems and continue to educate them via emails so that they can pass this along to their colleagues.  Clients are the life source of this industry and if this industry continues to kill the source we will perish.

A moment of disclaimer:  There are those isolated moments when you may feel compelled to help a group [non-profit organization etc] out for a lower rate to see their event excel.  That’s totally different from engaging in a long term engagement at a rate below industry standards. The fact is that you are not going to be able to staff it with quality specialists for an extended period of time.

The sad part is that many protection providers see wealthy clients as a golden goose egg or an endless pit of money and price point to the value of the client and not the job.  You are robbing them by doing this.  The other problem I see, is that Specialists who are coming back from overseas making sandbox money feel that the sand in their boots puts a higher value on what they should be paid.  Don’t call me then.  Window licking and hanging out of an SUV with a “chopper” M-4 [aka shorty] does not make you a first round draft pick and raise the salary cap.  Your experience most often gets you on a team, but the rates are different here.  In fact, the rates in the box are not the same as they were in 2003.

I know some of the company owners are slamming their fists on their desks now and think I am wrong.  That’s fine, call me and I can tell you why you are either killing the industry or killing the life line-The Client.

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