Imagine yourself as a contestant in a game show where you can actually choose your prize, then design a plan to capture it. You are given a limited bankroll to finance the venture and a group of people to whom you must answer. With each decision you make you must convince them that you are spending your bankroll carefully and wisely.
Life in the business world is kind of like that, isn’t it? You have your eye on the goal and you must use every available means to achieve it. Trouble is, an unlimited budget is a luxury in today’s business climate, so the reasonable goal is to wring every last penny of value out of each precious dollar spent. Now that sounds like the right thing to do, but sadly, the first impulse is to tighten the purse strings at every portion of the project without taking the long-range view. The end result is this … you get what you pay for. Warren Buffet, Bill Gates, Henry Ford, W. Clement Stone and others of their ilk have created their own version of James Goldsmith’s quote, “if you pay peanuts, you get monkeys.” Although it’s an amusing statement, it’s sobering in a business setting. Yet, time after time, companies will choose to pay peanuts (or cut corners) and still expect high rewards.
Here’s an example:
‘THE’ Company has decided to launch a new product. However, they are uncertain whether their product will resonate with their customers and prospects. They interview two research and marketing consultants (Company A and Company B) and hire the one which offers focus groups for less (B), knowing they will need several to cover every possible scenario. Bear in mind, however, that Company A had guaranteed ‘THE’ Company that the results could be generated from four focus groups. ‘B’ Company did not. For the sake of a visual, let’s say that Company A charges $1000 per group to moderate (4 guaranteed groups = $4000). Company B charges $700. Oh, what a savings, right? Only $2,800 with Company B.
Once hired, Company B finds that they need five or six groups to glean the information ‘THE’ Company is looking for = $3500-$4200. On the surface, it appears that $3500 for 5 or even $4200 for 6 groups can be reported to your overseeing group as more value, as Company B was at $4000 for JUST four groups.
Let’s dive deeper and see if it is. Every focus group requires secondary expenses … room and equipment rental, travel expenses for the moderator, time spent by ‘THE’ Company to sit in on groups, group costs – recruiting, incentives, meals, etc., adding up to possibly another $2500+ per group. Company A – 4 groups $4000 + $10,000 = $14,000. Company B – 6 groups $4200 + $15,000 = $19,200. Suddenly the perceived value (not to mention the typically tight timeline) vaporizes into thin air. It is far better to review the track record of the competing companies, get referrals, and analyze where the true value lies. A talented moderator gets results and it’s not the letters behind the name, or even all the training courses completed, that generates the value it’s the moderator themselves. This comes through a mix of experience and personality. Know who you’re getting and what they bring to the table. Don’t be afraid to follow up on references, it could, afterall, save you many peanuts in the end.
Bottom line question … do you want monkeys or practical results?