Let me begin this piece with two candid confessions:
- I am terrible at finance
- I am equally bad at negotiating
This piece, while a part of the ‘PostScript’ series, is not about one incident or story. Rather, it is a distilled essence of multiple experiences over my professional and personal life in the area of fees/ payments.
Today, the PR fraternity laments the hard bargains been driven by clients. This also leads to agencies undercutting their competitors time and again, just to ‘win’ business.
The practice of ‘undercutting’ has some serious consequences. If a client is not paying enough, and the PR partner wishes to earn some profit (isn’t that why anyone is in business?), the least experienced resources in the firm are asked to service the account, simply because they are the cheapest. It does not take very long for a client to realize that the output is delivered by the partner is much less than what was promised/expected.
It is only a matter of time then, that the client gets really unhappy and jettisons the partner.
I recall being a speaker at a PR event that was organized many years back in a place called Lavassa. The subject of agency fees and undercutting had come up for discussion. I remember saying that the heads of the ‘5 families’ (no connection with the New York mafia; the reference is to the heads of the 5 top PR firms) should get together for a joint meeting and agree that none of them would quote less than a particular amount just to ‘win’ a client.
I do not think that meeting ever happened, and the practice of ‘undercutting’ continues to this day.
The old adage, ‘If you pay peanuts, you get monkeys, has always applied to both business situations as well as personal lives.
Forget the PR profession for a moment. Let us take our everyday lives.
Everyone wants a great deal, but we all want it cheaper. Be it vegetables, or shopping in a general store, or paying those who work for you…most of us want to bargain.
I started this piece by speaking about being bad at negotiating. There is a simple reason for that. As an individual, I do not like to bargain. Nor do I like to undercut. In fact, I do the very opposite – for sure in my personal life.
I recall the day my driver joined me. After he did his test drive and proved himself to be a good driver, we came down to brass tacks. His salary. He asked me for Rs 3000. I thought for a moment and offered him Rs 3,500 instead. He could not believe what I had said, but he went away delighted. He has been with me now for 25 years. You can take a guess as to what I pay him now!
It happened with our maids…my wife was bargaining when they asked for a salary hike. I stepped in and took her aside and told her to double their salaries. She was not convinced, but anyways did what I had said. Both our maids have been with us for close to two decades.
Here, I am reminded of something which my maternal grandmother once said to me, as I was setting off to East Germany for my first job. She said, ‘Atul, I wish you the very best. You will do well and succeed and make a lot of money. But if you want to be happy, look at those who have less than you, and not those who have more.
I guess that may have been my guiding principle.
Wouldn’t it be wonderful if you pitched to a client, who was delighted with your presentation, and did not bargain for a lesser fee, but said instead, ‘I liked your presentation and am fine with what you have quoted. In addition, if you exceed your deliverables, we will give you a bonus as well.
I have been fortunate to have worked with clients who did that. They believed in us and actually paid out bonuses for superior work done. Most importantly, they did not choose another agency that offered a cheaper option.
In fact, just before I ‘retired’, a client of long-standing decided to give their business to another PR firm because the other firm was willing to do it for 50% of what we had quoted. And guess what, that client has come back to the firm I last worked for…at the fee we had originally quoted!
I suppose it ultimately boils down to the perceived value delivered for your services.
Be it a PR firm, or your driver, by paying what they expect, if not a little more, you are buying not just their services, but their loyalty, and their respect. They will be yours for life. This is something I also practiced in my days as a client, and I wish more clients would look at the service delivery person as a partner and not a ‘vendor’.
I cannot end this piece without mentioning something that happened last Saturday. I was traveling by the Rajdhani Express from Mumbai to Gwalior. On alighting at Gwalior station on a cold wintry morning, I hailed a coolie to take my bags. He was an elderly man, and I asked him to get a trolley instead of carrying the bags on his head and over his shoulders. He said, ‘Nahi sir, I can pick these up. I will charge Rs 300/-’.
He managed to carry the load to my car, and when he had put the luggage in the boot of the car, I gave him Rs 500/-. He said that he did not have a chance to which I responded saying that he can keep the money and that I did not want the change.
Since he was wearing a mask, I could not see his face, but I could see his eyes. And in those eyes, I saw tears. Of happiness, of gratitude!
As I was driving away, he came to the window and said, ‘Sir, how can I ever repay your kindness?’
As my car drove away, I found my eyes moist too. Because I had given someone who had less than I do, a wee bit of happiness!
A smile. Loyalty. The promise of better service. Respect.
These matter more!
So frankly, it does not matter to me if I am not a great negotiator or poor at money management.
I am happy the way I am J
- Sometimes it pays to give more, and not haggle for less.
- A smile is worth millions.
- If you get more, you will give more.
- Just a little more will get you years of loyalty, and respect, which is impossible to monetize.
The views and opinions published here belong to the author and do not necessarily reflect the views and opinions of the publisher.