Good service or low prices? The MD of office interior provider Rainbow argues that clients cannot expect suppliers to deliver both
Words by Tony Antoniou, managing director, Rainbow
After going through the exercise recently, I found that a proper company rebrand is actually a very fulfilling and enlightening exercise. It makes you think about your company: how you see it, how clients see it, and what makes you different – what makes you stand out from competitors.
I really enjoyed the experience, and certainly what came out of it was the fact that for us, relationships matter. This is what drives us, helps us forge long-term relationships with clients and suppliers and, ultimately, it’s what has made us successful for 29 years.
The thing is, service comes at a price. It is not possible to give the highest possible service and also the cheapest prices.
Of course, that’s exactly what many companies want from all their suppliers; in fact, this is what many of them are demanding. Yet at the same time, in their business, they want to make as much money as possible!
A few years ago, after losing a tender for 1,100 workstations, I asked for a meeting to explain where we had faltered in our bid and the client said our competitors were working on margins way down in single digits. He then went on to say that this was the first time he had operated in our industry and he couldn’t believe how professional it was, how knowledgeable and experienced the people were, and how impressed he was with us all.
For the tenders, he had engaged with our regular competitors, companies I have a lot of time and respect for because, like Rainbow, they have been in the industry for many years.
This is the dilemma we are beginning to face more and more and this is why I ask the question: service or price?
We are competitive – in fact, we are often pricechecked by our clients throughout – but there are companies out there on the internet who will buy business. It is the internet more than anything else that has allowed this to happen, and as convenient as it is, it is also extremely frustrating.
In our industry pitching for a project takes a huge amount of expertise, time, effort and expense. We will provide many quotations, produce sample products, mock-ups, 3D renders, and [offer] showroom visits, countless visits to site. We will work with an end user, an architect/designer or fit-out contractor to come up with the ideal products and specification for the project. Following all this work some customers take all of our information and find a supplier online who will better our price by a few per cent, yet has done nothing to win the business other than receive an opportunity to provide the cheapest prices once all the hard work has been done to reach that point.
With cheap prices comes cheap service – they go hand in hand.
My concern is that people are taking the way they purchase goods personally and applying this to the corporate world. Primark, Lidl, Matalan and Aldi are great examples of this. They are all performing really well, but this is because they provide relatively low-value items – the food will be eaten in a few days, and if the clothing does get lost, damaged or falters in any way it will be disposed of and more cheap replacements will be purchased.
Personally, I would always shop for higher-value items, such as a TV, speakers or home furniture from a shop renowned for great service and knowledge of their products rather than the cheapest price. Many other people feel the same, which is why John Lewis has performed so well over the years, although they too are feeling the pinch at the moment.
If you are responsible for delivering a new HQ or a workspace refresh should the principles people use for their home shopping be applied to their workplace needs?
When dealing with items in the workplace there is so much more to consider, such as the ergonomics, the product reliability, the need for deadlines to be met, the consequences to face should items turn up late or if they were to falter and injure someone.
These consequences can have a huge impact on the business and the people who work in the organisation, so you need to ask the question, who do you want to work with? A company with many years of experience and a track record of delivering such projects, or a company who is just buying the business by giving ridiculously cheap prices?
‘Measure twice, cut once’ and ‘buy cheap, buy twice’ are two phrases that come to mind and I am sure there are many more that all relate to the fact that it often makes more sense to pay the right money for a product and get the best service because in the long run it works out to be the best value overall.Of course, the supplier needs to be reasonable in their pricing. Even good-quality suppliers like Rainbow need to be competitive, but they should be making a profit, not profiteering. After all, you want your business to make a profit, so you should allow your suppliers to make one too – though maybe not as much as you do!