Tuesday, May 11, 2010

More Like a Guild, Less Like a Factory

I had an interesting conversation with a good friend yesterday. Jim’s organization has a well-deserved reputation as one of the leading design firms in the Southeast.

Businesses that rely on construction were especially hard hit during the recession. His firm was no exception, yet they managed to maintain most of their clients as a result of superior quality work. During our chat he remarked on a disturbing trend I had heard from other business leaders.

Some prospective clients informed him they should be able to purchase his services at rock-bottom prices (below cost). His firm provides a custom service, not a product or commodity. His prospects’ reasoning went something like this: “Since you need this work, and probably don’t have enough business right now, you should be happy with what I am willing to pay.”

He conceded that, barring any other work his firm might consider that kind of offer before declining it outright. But he and his team know from experience that as the economy picks up, those low-bid clients will require just as much attention (or more), absorb their workers in work that affords little or no profit margin, distract them from better-paying clients and create “low-quality service experiences”.

Like Jim, I would place my confidence in his ability to stabilize and grow his business by creating better ‘experience’ opportunities, rather than better pricing strategies. Why?

Psychological research suggests that, in the long run, “experiences” make people happier than possessions. Think of “possession” as the end product, service or deliverable, in Jim’s case, an architectural design. Even more significantly, these customer experiences have the ability to make other people (future clients) happy, as well.

A client will remember his team and the experience, long after they have moved in, lived in and/or sold the property Jim’s team designed. Jim’s team will remember working with a great client and take pride in their work.

Likewise, you will remember how the manager treated you with respect long after the fresh plastic smell has faded inside your new car. You will remember the exceptional flight attendant and the way he or she treated you long after that (hopefully) unremarkable flight.

Our lives have the potential to change when we deliver or receive one of these great experiences… Wow! That’s an amazing concept and scientific fact. Given the choice, I’d prefer to work for an organization that strives to create those experiences. Wouldn’t you?

Jim was smart. He and his team sat down and clearly defined their challenge – ways to express their passion for design and how to deliver it affordably– with customer feedback and input driving most agreement.

Based on his client feedback, Jim began a program to connect clients with suppliers in real-time virtual meetings, with team members acting as facilitators. They also began to explore innovative ways to collaborate with clients, such as design contests that include local students and virtual tours of buildings around the globe. Finally, they are making sure that each one of their employees submits ideas for regional competitions, with opportunities to champion their ideas.

Essentially, everyone serves a customer. The trick lies with understanding your customers and their needs, respecting their values, and delivering memorable experiences as part of every transaction.

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