2017-12-08

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Too close a shave! Matt Storey, director – business development at Gallowglass, talks

Have you asked your event supplier to reduce their price yet go above and beyond? Stop it!

How often have you heard clients saying they want “more for less”? Well personally, I’m sick to death of hearing it and I think it’s time someone challenged a few misconceptions. Moi.

There’s a prevailing mindset that production companies and agencies build an element of “fat” into their quotes, and that haggling is an integral part of the pitch process. So, it’s a common occurrence these days to be told: “Yes, we’d like to work with you – but could you just sharpen your pencil and get back to us with a better price?” Or (worse!)… “You’ve done a great job for us for the last three years but now we need you to do it for 20 per cent less”. Oh really? How does that work?

It’s assumed that pressure applied from the top can be passed down the supply chain, so if everyone just scrapes a bit off their margin, the strain will be imperceptibly absorbed and the service delivery unaffected. Wrong.

This culture crept in during the last recession, when so many businesses were too fearful to stand up and say: “No – it can’t be done. It’s simply not possible to deliver a £500,000 project for £350,000 without incurring some serious risks.”

One reason why the trend has proliferated is that hardly any agency account managers are formally trained in negotiation skills. What chance do they have against those graduates of the Alan Sugar charm school that gleefully brag about their ability to screw suppliers into the ground? And agency bosses are equally squeamish. Desperate to keep the business, they cave-in to client demands, guiltily blocking-out the sound of their own finance director hissing frantically about the bottom line.

And as for the client – if they’ve successfully driven down the price, they’re hardly going to lose any sleep for choosing “minimum” over “optimum”. After all, which buyer has ever had the balls to say: “What could you do for us if we paid you more?”

But maybe somebody did just that. I’ve been told that back in the 80s, M&S adopted a quality standard policy with its suppliers along these lines: “We’re not impressed by companies so desperate to undercut their competitors that they risk being unable to deliver on their quoted price. Protecting our brand is paramount, and we need to know that suppliers can produce consistent high quality with no availability glitches. So – tell us how much we would need to pay to get that assurance?”

Of course, if you believe you can get away with “adequate” you won’t see much incentive in paying premium rates. Fair enough – if you’re buying a can of beans. But in our industry, “premium” means providing the level of expertise necessary to overcome the plethora of delays, misunderstandings and accidents that beset even the most meticulously-planned events.

And that’s the time when the difference between mediocre and exceptional really kicks-in. Why? Because it takes smart management backed by a concerted, collective effort, to rescue a serious situation. Exactly the right people need to be on-hand to take decisive action. Whether it’s production managers, stewards, security staff or medical teams – if the critical expertise is thin on the ground, an unforeseen glitch can rapidly escalate into a crisis.

It’s true that most calamities can be sorted by a wodge of cash. (Shame about that carefully-honed budget.) Even so, resources are finite – especially at short notice. Imagine being called by two companies, both grappling with emergencies. Suppose one of them was a business that had traded honourably with you for several years, and the other was a hard-nosed operator notorious for doing things on the cheap. Which would you give priority to?

Suppliers naturally gravitate towards clients who appreciate the value of what they do, and corner-cutting is a practice applied by the very arrogant – or the very naïve.

So, to clarify, what do we get for less? Less!