The end of the experience?

I was just reading an article about Starbuck's recent attempt to counteract the attack of McDonald's and Dunkin' Donuts on their coffee stronghold.  For those of you who don't visit a Starbucks often, I'm talking about Starbucks recent introduction of instant coffee, ready to be made anywhere at any time.

I imagine for those regular Starbuckers, instant coffee seemed like the last thing that Starbucks would put out.  Isn't Starbucks supposed to be about the experience?  About coming to a local coffee shop, hearing the beans being ground, seeing the barista that knows your name and drink from memory?  Is Starbucks really lowering themselves to bulk instant coffee by the pound?

You have to hand it to McDonald's.  They brought the coffee giant down to their level and in some cases, are even beating Starbucks in taste tests.  The Execs over at McDonald's somehow timed their entrance into the specialty coffee market just right to coincide with the drop in the economy.  It seems that it's no longer about perfection and experience.  It's come back to speed and cost.

I tell you that story, to tell you this story...

I met with a Business Development person from an Architecture firm recently.  I asked about her company's value proposition to prospective clients.

I asked her, "Are you going in to these clients saying, 'Yes, we may charge 6% compared to 4% from our competition, but that's because we're better overall, have fewer change orders and offer better design and that's why we're worth the extra 2%."  She answered that that was the old way of doing it and that now all the Owners care about is that extra 2%.  Their firm has had to swallow their pride in their work and get down to fight in the gutter with the lowest bidding architecture firm.

If you're in the AEC space, this is probably a very familiar story right now.  Seems that everywhere I turn companies are having to throw in the towel on experience and overall value in order to just get the work in the door.  Getting business in the opposite way that they're used to.  As much as I hate to say it (and I really do), the price has finally (but not forever) become the great equalizer.

Some day my prints will come...

I have full faith in the fact that one day soon, life will return to normal, value and experience will again be the new black and we can go back to charging normal rates for our services, but it may not be this day.  

The challenge then, is to figure out that if you can't beat 'em, join 'em and how you're going to make money at whatever level you have to stoop to.  In fact, find out how you can use this "once in a lifetime opportunity" to open doors you couldn't open before.  Go back to those clients that haven't worked with you because of your rates and show them you're hungry.  Since value and experience have gone out the window, they're more likely to be looking at anything that comes their way right now. 

 If you can take it on the chin, smile, ask for more and grow your list of clients, you'll come out happier and more profitable on the other side.

Jared Willis

Comments

[Paul D'Souza]

Hi Jared - this is a well written article. Love the story on a story!

I agree with your assessment that it's time to close deals at whatever price you can get for them. There is what I call a "New sense of Value" that our customers are working with. There are also, a lot of indicators that this might be the new "normal".

Wishing you all the best,

Paul
http://www.pauldsouza.com/book