Choosing a R & D consultant

Cheaper is not better

The relationship between the value and price of a consultant

The picture above says everything. I do not know who took this picture but I thank him.

There is always someone who will do it for less.

Many sayings essentially say the same thing:

• ” A picture is worth a thousand words “;
• ” You get your money’s worth “;
• “You never get something for nothing”;
• “Good is not cheap, and cheap is not good”;
• “If it’s cheap, it’s a trap.”

Some organizations want to minimize costs and they limit their analysis to a reducing criteria such as he cheapest.

When selecting professional services there are other essential variables. You must take into account the qualities of the consultant and of his finished products and the professionalism of his services.

Value vs. Cost

There is a difference between the value and the cost of a product or service. Both are defined through the perceptions of the buyer and seller about a product or service. For a supplier to truly deliver value to its customer, it may not necessarily be at the lowest cost. For a customer to feel the value of a product or service, they need to define their expectations in terms of value.

Throughout the selection process the central difficulty will be to clearly express the expectations about the final product. It will be difficult for the customer and for the supplier. The value (expectations) of a given service must be defined and a cost may be associated with it, both must be aligned between buyer and seller.

For example, in the image above, the “customer” provided a very detailed picture of his expectations as the final product. But he made one or two of the following mistakes in the  selection:

Three potential errors:

1: The client asked for a price for the job and jumped on the lowest price without considering the results or consequences;

2: The client did not perform any research on the consultant’s experience. Examples of previous results would have confirmed that skills matched expectations;

3: The seller grossly overestimated his abilities; he did not know the actual costs and he probably provided a disconnected proposition of the relationship between value and cost.

How to avoid these mistakes

To avoid the risks associated with one of those three errors, simply extend the analysis to other very important elements. Simply ask :

• The consultant’s experience in your industry in relation to the expected result;
• Examples of results, similar projects performed by the supplier, to validate value in relation to costs;
• Evidence of recognition by industry, peers or the public;
• An illustration of the methods used by the consultant;
• What differentiates the supplier and who places him above its competitors and the standard practice.

With these answers, you can better evaluate the acceptable cost in relation to the value of a consultant.

Conclusion: Reality check beyond the price

Beware of the vendor trying to sell you only a low price because you will often be disappointed with the end result.

Customers and service providers must follow a joint process to reflect project costs related to the capabilities of the provider. It is often necessary for both parties to do a reality check. Once completed, the result becomes clear and the expectations can be aligned. This will allow a better experience for all parties involved.

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