Why a Price War is a Losing Proposition


#ThoughtLeadership

To remain sustainable, Think Event co-founder Ronald Lim urges event agencies to demonstrate their value instead of dropping prices.

Ronald Lim

Events and creative industries are becoming more and more competitive, while our clients now have more options than ever before. Is a price war the way to go?

Many event agencies across Asia are moving toward this direction, but is this good for our industry?

For survival, many agencies opt for a short-term solution — winning bids by offering below market price. Have we forgotten time is money? Have we forgotten that our skills and experience cost us time and money?

Have you ever wondered why patients never question the breakdown of a doctor’s consultation fee? Meanwhile, our clients constantly ask us to justify our professional management fees? We must communicate our value.

If we want clients to understand and appreciate our work, we must ensure the events industry remains professional — and that our clients recognise that we are business strategists, not travel agents or party planners. We must also work hard to attract good talent and secure our future. But securing good talent is becoming increasingly difficult. And the more we sell ourselves short, the more harm we do to our industry’s reputation.

Very often we ask our peers, why can’t we find good talents from schools to join our industry? Parents don’t believe that our industry will give their children a bright future, a future that will bring food and money to the table.

Once you go cheap, it is hard to bring your prices back up — despite the cost of materials. This impacts profit margins and eventually you will need to take on more jobs to make up the losses or to cover your overhead. Subsequently, the team will scream: “Burnt out!”

These reasons, should be sufficient for us to end the price war.

We must prove to our clients (and parents of young professionals) that our industry deserves the respect of any other profession — that, as event professionals, we can make money through service, creativity, and skill.

It is not OK to allow clients to disrespect our creativity by saying that seemingly ‘easy’ tasks (like designing an event backdrop) should be free.

We should compete in service and creativity, and that will bring our industry forward. We can always have unique selling points and value-adding services when we compete with others.

I know I’d rather a client choose my services because of my team’s creativity, and not simply because we are cheap.

Let’s end the price war together.

Ronald Lim is co-founder and event producer at event-management agency Think Event, based in Kuala Lumpur.

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