Brother, Can You Spare A (Nickel &) Dime?

Posted by Ron Sellers Sunday, September 19, 2010, 12:42 pm

I’m sitting here reviewing yet another focus group facility invoice.  It has all the “usual suspects” in the charges – recruiting, facility rental, incentives, client meals, respondent meals, etc.

Plus $11.00 for copies.

Seriously?  I’m paying you around $6,800 for …

I’m sitting here reviewing yet another focus group facility invoice.  It has all the “usual suspects” in the charges – recruiting, facility rental, incentives, client meals, respondent meals, etc.

Plus $11.00 for copies.

Seriously?  I’m paying you around $6,800 for two groups, and you’re charging me $11 for copies?

I really don’t like to get nickel-and-dimed from research vendors.  I’ve had focus group facilities charge me for easel rental, for the two beers my clients drank (even though they were sitting in the fridge without a price tag), for each soft drink respondents consumed, for placing bottles of water in the respondent room, and for removing all alcohol from the viewing room when a client didn’t want the potential liability if someone overdid it (although hopefully, my moderating wouldn’t have driven them to drink).  You’re killing me, here.

I’m already paying you $100 per group to press “record” on the DVD player.  And your 20% markup on the menu prices for calling to order our food.  And your markup on shipping something UPS for me.

I know you’re in the business to make money, just like I am.  But can’t you do it in a way that doesn’t make me feel like a giant ATM instead of your valued client?

I understand that you’re probably going to charge me for video, because many people don’t care if the groups are video recorded.  I know you’re going to charge me to put a big TV and DVD player in the respondent room, because most groups don’t require that.  I know you’re going to charge me for shipping, and observer meals, and other things that not all groups require, or that may vary quite a bit from client to client (e.g. one observer ordering a pizza, versus 16 clients drooling over the Ruths Chris menu).

But can’t you pretty much figure that every qualitative project is going to require copies?  Can’t you include some reasonable assumption of how much of a workout your Canon is going to get for the typical project, and just bury that in your price?

Maybe I’m wrong here.  Maybe if you bid $6,900 and include the copies and the bottled water and the easel and a couple of beers for my clients, whereas your competitor bids $6,750 and excludes all that stuff, your competitor would take business away from you.  Maybe other researchers would rather pay-as-you-go for all this stuff.

What do you say, other researchers?  Am I out of line here, or are you as tired of paying $11 for copies as I am?

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15 Responses to “Brother, Can You Spare A (Nickel &) Dime?”

  1. Nasir Khan says:

    September 20th, 2010 at 12:57 am

    Great! Competition in the research industry has gone down more to pricing than quality. Had we been concentrating on quality, clients would have found value for money. Research has become a “price elastic commodity”
    I also don’t like the idea of client-vendor relationship. It should be a partnership in continued category/brand (etc.) development. We must think of client-partner’s gain/loss, while they should think of ours. That’s the way it should have been. Unfortunately, we are down to “Brother, Can You Spare…”
    Thanks for this. Someone, somewhere, at times has to remind the research comunity where we are going wrong.

  2. Kent Crutchfield says:

    September 22nd, 2010 at 2:06 pm

    I don’t think you are out of line, I think the copies should be included in the price. You bring up an interesting pricing dilemma that we face at our company. It’s a constant battle to figure out how much to include in the price or to offer an a la carte menu of options in order to keep the initial price down.

    We opt for the all inclusive price but we offer moderators, onsite facility and many extras in our price. I’m sure we lose business to competitors who charge a low fee and then jack the price up with all the extras, but we don’t want to create the bad feelings that you have this case of $11.00 copies.

    In the end I think people are willing to pay a higher price if the value is there. Top notch moderators, a beautiful facility and everything taken care of with no sticker shock after the groups seems to be working for us.

    I’m not sure ultimately which option is the best one – perhaps we should do a focus group? 🙂

  3. Jim Jager says:

    September 26th, 2010 at 10:16 pm

    Ron:

    I am in complete agreement. As having the position of both owning a facility and moderating in many different facilities it is quite annoying. i had a facility charge me $81 for 81 black and white copies! Facilities nickel and dime and charge little hidden charges that raise the cost and alienate the client. Long ago we decided to include copies, snacks, faxes, TV and DVD players and pretty much everything else. We don’t believe in the nickel and dime. The costs on our bid are the costs you pay! Facilities need to recognize the size of the research investment and not add $11 for copies!

  4. Bill Jacobs says:

    September 27th, 2010 at 7:52 am

    There seems to be 3 types of facilities: The professional research franchise (like you find in an upscale business office); the cost focused franchise (like in a shopping mall); and the mom and pop facility (an old house next to the railroad tracks).

    Each model has a different monetization model; and consequently, each creates a very different experience. My experience is that types 2 & 3 nickel and dime you.

    So, I avoid types 2 and 3 if at all possible. Yes, it’s more expensive (but not that much more), but a latent function of focus groups is to impress your client with the experience. Types 2 and 3 make the client feel the moderator is WalMarting it. And no client wants a WalMart experience if they are spending $7K for a night of research.

  5. Randy Lewis says:

    September 27th, 2010 at 12:17 pm

    I’d be curious to know if this particular facility was one you have used before and have some type of relationship with, or if this was your first or second experience. Clearly they do not understand the concept of LTV (life-time value)or they would have chalked this up to a small investment with that in mind.

    I’m guessing this experience left a bad enough taste that you will do everything you can to identify a new supplier in that market. Talk about short sighted!If you are running a facility, this is admittedly a fine line to walk in this economic climate but building in $50 or so in your bid for copies seems to be a no brainer! I’ve seen moderators abuse the privlidge of not having to pay an itemized charge for copies, but not very often.

  6. Ron Sellers says:

    September 28th, 2010 at 12:03 am

    Actually, this facility is a very good one; one I’ve worked with for around 20 years on and off. This will not cause me to look elsewhere, because it’s just so common in the industry. There have been other situations where something like this has caused me to look elsewhere, like the facility that wanted to charge me $500 to remove all the liquor from the back room (they actually had a full bar back there, with prices on each bottle, and a fridge full of beer). I will not work with them under any circumstances.

    This particular instance was over $11, so it’s not going to change how I do business – but it is an example of how many facilities do things. I happen to find it very tiresome, but I hear from some facilities that they’ve lost jobs over fifty bucks. That’s why I was hoping to create a dialogue between both sides – to hear from facilities and to hear from other clients. I appreciate the comments I’ve gotten here.

  7. Judy Opstad - Owner of Focus Market Research Phoenix & Minneapolis says:

    September 28th, 2010 at 1:16 pm

    We include DVDs – run a 1/2″ stationary video backup and include beverages, parking and a minimual amount of copies for the $500 facility fee. B/W copies above the norm are 12 cents and color is $1.00 until we go to Kinkos. I am thinking of going with $550 as I feel this would be a fair price..It goes without saying that I would dispute the bill and never go there again.
    Come see our new offices in Minneapolis and Phoenix.. completely redone. Dont be a stranger. Judy

  8. Marisa Pope says:

    September 29th, 2010 at 2:13 pm

    Ron and gang,

    I wish I could say I completely agreed and I know I run the risk of being labeled a “mom and pop” shop since I have only three facilities in two markets and operate as a sole proprietorship, but this question of “nickel and diming” has been a hot button among facility owners for years. I believe I must chime in.

    I’m not going to charge a client $11 for copies, but everyone must understand there is an inherent cost in producing them – copiers are not cheap and they are often leased. There are, in fact, fees associated with them – by the page in most cases. Not to mention toner, which is outrageous!

    Yes, we could assume X number of copies with every project, but what number would be X? And if you go over, what to do? If you don’t use as many as we’ve established as “X”, how is it fair that we built it in? If clients asked for the same services when they arrive, we could easily accommodate this all-inclusive pricing model, but much like a 5-star resort, those that don’t require as much end up paying for those that do. What to do? How to be fair? If I can also address a couple of your other points…

    The reason we charge a percentage on top of your food order is not because we can…it’s because you would much rather see it plated than in the Styrofoam containers in which it arrives. And those plates are washed, shined and put back in the room – that’s labor. And we aren’t just pushing a button in our A/V rooms; we maintain expensive equipment (in most cases – like mine – the system cost over $100,000 to install) and skilled staff to man it so you get a good recording.

    There is a reason for the madness you see as nickel and diming; we see it as a reasonably fair business model – charging clients only for the services they actually use. If you can think of a way to treat our clients (who are not all equal in their requests) fairly using an all-inclusive pricing model, you would be a hero in this industry, I can promise you that. It’s a constant struggle for everyone on our side of the equation.

  9. Ron Sellers says:

    September 30th, 2010 at 9:37 pm

    Marisa, I guess the question is what’s the trade-off? Are you willing to be potentially perceived in a negative light in order to charge the exact cost for the exact number of copies used?

    I’ll give you an example. I recently traveled to New York for a client. I have already submitted all my travel expenses. Turns out that I missed a $14.99 charge. Now, the client has already agreed to pay all the travel expenses, and that’s a legitimate travel expense. But I’m not going to go back and issue another invoice for the charge, because I feel that will label Grey Matter as a company that’s going to nickel-and-dime clients; that we’re so worried about every penny that we’re going to inconvenience the client.

    I regularly deal with unusual requests that I probably have the right to bill the client for. “Will you check how I’ve summarized your report for my boss?” “Can you provide the original travel receipts, rather than scanned copies?” “Can we add a banner point to those tables?” “Can you put our logo on that PowerPoint presentation?” All of these little extras are unexpected, unbid, and cost me time and sometimes money. But unless the request is unreasonable, I’m just going to do those things for the clients so they know they can always count on me.

    I’ve got to believe that most facilities know about how many copies they’ll need for a typical project. We’re probably talking about the difference between $11 and $30 on most projects. Facilities can’t average those costs out and just hide $15 or $25 in their bid?

    And how far do we go for the “charging for services used”? If I show up with one client, that will probably take less of the host/hostess’ time than if I have 8 clients in tow. Shouldn’t I get a break? I drink one bottle of water for the night – shouldn’t I get $5 off my bill compared to the client who drinks five? If I like it particularly cool in the room, should I get charged an extra $20 for the extra AC?

    There is obviously a level of reasonability to all of this – facilities need to be fairly compensated for the work they do, but I also don’t want to be nailed an extra $2 because I grabbed a bottle of water out of the fridge for a client who’s having a coughing spell. It’s important that facility operators know how their clients are thinking – and I for one am left with a bad taste when the facility wants to charge me $10 to pull an extra easel into the room or $11 for copies. Again, that’s just my opinion…

  10. John Theodore says:

    October 4th, 2010 at 12:49 pm

    I tend to agree with all Ron’s points. I’m especially outraged by the costs of food (snacks, beverages, etc.) provided in the client rooms as well as the upcharge on take-out orders. To me, this is where facilities could be more reasonable. Also, I don’t need someone putting my burger and fries on a plate, that should be an optional service that facilites could provide if requested. In all, facilities should rethink their business practices. They should be more concerned about building relationsihps with clients rather than milking them for additional dollars. I definately share Ron’s pain.

  11. Tim Grainey says:

    October 9th, 2010 at 10:49 pm

    I agree with Ron’s points. Research companies and research facilities should be on the same page—pleasing our clients—which drives loyalty and repeat business. Maybe the way ahead is to have a few hundred dollars in the bid for a variety of miscellaneous issues (water, Xeroxing, overseas phone calls) up to a point where these services are being used in abundance. The research industry in general is on such tight budgets that we’re just trying to be able to predict our costs, facility costs and final invoicing to our clients. Like Ron, I’ve received bills with so many add-ons that I couldn’t believe it. We are looking for predictability in pricing and to me, that correlates highly with quality—we seek out those facilities that treat us and our clients well.

  12. Frank Martin says:

    October 12th, 2010 at 10:02 am

    Interesting perspectives here. As a moderator and a facility owner, I can feel the pain of both sides. While as a Moderator and researcher I hate being nickeled and dimed, the facility owner in me bristles when Moderators beat us down on cost, then come into the facility and want ten copies of a 30 page document, want coffee from Starbucks, pasta from Maggiore’s and dessert from the Cheesecake factory, fuss about prepaying the incentives and bring the check that day, meaning we have to “front” the money for the incentives, and then steadfastly refuse to pay until they are paid, which is sometimes 60 days following the groups. The problem of course is that we facilities develop the fees and policies for the problem moderators, and then apply them to all clients to “keep from getting burned”. So while I understand why it happens, I agree we have to find a better way.

  13. Amy Shields says:

    October 12th, 2010 at 1:11 pm

    I love an open and honest dialogue, but prefer a little less generalization, as a rule. As with the professional respondent issue, this topic is not all that novel. Facilities, moderators and end-users have been dialoguing on this as long as I can remember. As someone who also works on the facility and recruiting side, AND the field management and consulting side, my perspective typically includes viewpoints from both sides of the fence. (Even though my ideal outcome would be that there are no fences!)

    I have received invoices from vendors that absolutely include fees that had never been discussed, thereby making it impossible for me to build in to the budget, etc. However, I feel that it is my responsibility to make certain that I am aware of all charges before I provide a budget to my client. I make it very clear to my partners that I will not be able to pay for any services not clearly outlined (other than last minute requests, or unknown costs such as parking, copies and client food services). I have never had an issue with adding these costs as a separate line item for my clients, who clearly understand there are some unknown costs and that they vary from market to market. By being a “good client”, I provide detailed information at the bidding stage, and always specifically ask if there are charges for copies, parking, etc. While I find most facilities to be consistent with their bidding and billing policies, there are always exceptions and, of course, I base my decision on who to partner with on a myriad of things, including invoicing hassles. (To raise another point, have you not equally run across companies that significantly under-bid? I spend as much time going back to vendors questioning their pricing – to avoid unacceptable “surprises” – as I do with the final invoices. It’s a relationship, so I make sure to point out mistakes in my partners favor too!)

    From the facility perspective, it’s simply not fair or realistic to insinuate that all clients are equal, or that what’s less important to one is not the most important thing to another. For instance, you may be fine with receiving your meal in a box, where that lack of service would cause another client to not return and to tell everyone they know to avoid such a facility. (Hence, why there’s a rating for food services in the Impulse Directory, because this is of major importance to most clients. The recruiting can be perfect, but if the food is not served in an attractive manner, that matters more…to some clients.) There are obviously very real over-head costs associated with providing these services and all client needs are NOT the same and cannot be “averaged out”.

    It’s unfortunate that there doesn’t seem to be a real sense of partnership with the companies you are using. The term “nickel and diming” brings such a negative visual to mind. It’s my belief that open dialogue is the only real solution; with both sides communicating thoroughly, respectfully, and with an open mind to the other perspective. It would alarm me greatly to learn that a client of mine felt that my company was “milking them” (because I certainly don’t feel like that when I receive a screener that is much more difficult than the original specifications that were provided, or when we need to scramble to make a last-minute project/request happen, etc). I have always felt that it’s our job to make our clients look like a rock-star to their clients, and to have vendor relationships with people I trust and respect. I personally feel it’s working out pretty well.

  14. Ron Sellers says:

    October 12th, 2010 at 6:44 pm

    A few people have talked about partnerships. I do a lot of groups in any given year, but they’re spread all over North America. I might return to the same market once every two years (maybe less, maybe more, depending on the market), meaning I’m working with the same facility once every year or two. Is it reasonable to expect a true partnership in that level of connection? Meaning should the facility be expected to know what’s important to me and how to price things for me? I can see if I work wtih the same people over and over again, but if I go to Tampa once every couple of years, can they really anticipate my needs and what’s important to me? And am I going to take the time to tell each facility (during the bid process, which is the only fair way to do it) my thoughts about all these extra charges?

  15. Jessica Josset says:

    December 22nd, 2010 at 11:31 am

    Sorry for the delay in responding! I’ve enjoyed reading all the responses to your blog posting.

    Fieldwork does it’s best to avoid nickel-and-diming, but it can happen unintentionally. I agree that $11 is a small line item on an invoice, and I personally do my best to avoid invoicing this small of an amount. Fieldwork’s policy is to offer the first 100 black and white copies complimentary onsite. We know that clients are going to visit our facilities needing some copies made. However, there are also clients that visit us needing hundreds of copies, both B&W and color, and there has to be additional costs for that. Not only are we charged fees from our copy vendors, but it also takes additional staffing to meet these requests while still servicing the clients we have onsite. We NEVER charge for screener copies when setting up projects, those copies included in our recruiting fees. I understand you feel that these costs should be built in, but there’s just no way for us to know which clients will need the copies and which won’t. In my experience, clients do not want to pay a higher price for what they won’t be using and I’m sure we would lose work. In addition, how do we know how much to add in beyond the complimentary copies we include in our pricing structure?

    I think communication is key. When working with so many clients, it’s difficult to know where to draw the line of what they believe is reasonable and what is not. I would never want a client to feel like we are nickel-and-diming but if they do feel that way, I want the opportunity to change their opinion. If a client is left with a bad taste in their mouth, it’s our job to do what we can to meet their expectations on this project AND know their preferences for future projects. We are in a service-oriented business and this is an important issue that will continue to be discussed among our industry.

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