company values

Looking back on the year, arguably the most controversial and divisive issue was the RFP issued by P&G. As I've written about in the past, P&G offered many companies the opportunity to be one of their preferred vendors. If you filled out the required paper work offering P&G below market and fixed rates you could qualify. It's stirred strong emotions within the production community. It got me thinking about the companies that were on it and the companies that were not.

When a company opens for business they make a decision, knowingly or unknowingly, what's their value proposition. In other words, why does a client solicit their services. There are many specifics but at the core it can be broken down to two simple reasons, price or quality. This doesn't mean they are mutually exclusive but one is usually the more dominant factor. 

In the case of the P&G list, when opting whether to participate, each company was faced with a variety of issues to consider. The most obvious being what percentage of your business is with P&G brands. If it's miniscule or considerable the choice is easy. If it is somewhere in the middle it becomes less obvious. This is only the financial part of the equation. There is also an emotional one. 

It harkens back to the value proposition. A client comes to Epoch for specific esthetic and skill. They are willing to pay a fairly negotiated market value for our services. Any preferred vendors list prohibits that process. Primarily for this reason, along with the fact we have historically produce so little work for P&G, we did not participate. I want the free market to determine pricing but mostly I want to position our company value proposition and expertise at a premium.  

For the record, I have no issue working on a P&G product. The only determining factor is quality of the creative and cost of production. If we find them both within acceptable means, we will be honored to compete for the work. Of course, the vendors lists may prohibit that from occurring. It is the decision we have made as a vendor and P&G made as a client.

On the other hand those that signed on for the list also made a value decision. They decided to be valued not on their expertise but rather on their price point. In other words, it's not about what they do well that sets them apart but rather the cost they can deliver on. Once again, if faced with being ineligible for a significant percentage of your company revenue it is hard to decline. I totally understand it from a business perspective. The problem lies in that P&G stated that production expertise matters little. Our acquired skill and natural talent value is minimized. 

A production company can continue to survive with the decision to participate but they must realize it has its consequences. Your value is based primarily on cost. P&G and soon other clients will expect that price point. More importantly it is how your company brand is perceived. Price over quality. 

Whether on the list or not on the list, ask what value do I place on myself and my company. Should I determine that for myself or let someone else do it for me. It's yet another good question to ponder as we enter into 2010.