Category Archives: Worldly Advice

Why Buying at the Lowest Price Costs you the Most

Cheap is for a Reason

Anyone who knows me knows my on-going railing against lowest-priced providers in SatCom space and the farce that they are doing their customers any kind of service. I’ve heard story after story about the complete lack of support that a lowest-priced provider offers, including a disaster-response agency whose lowest priced provider’s ‘support’ is a web page; fill out a form and never get a response.  Perfect: Mission-critical responders who can’t get help.

The conundrum is that we ALL know better – that the lowest-priced providers can never provide any support – yet for some reason, some people cling to the fictional believe that ‘cheapest is best’.  No.  Cheapest is not best: Cheap is just cheap and there is always a reason why something is cheap. Wal-Mart doesn’t provide personalized service and Nordstom’s is not the lowest-priced store.  Let’s consider a John Ruskin quote from over 100 years ago:

There is hardly anything in the world that some man cannot make a little worse and sell a little cheaper, and the people who consider price only are this man’s lawful prey.”
(That lowest price is merely cheap is not a new concept)

I L-O-V-E that guy and his philosophy.  But here’s the thing about SatCom:

Everybody is selling the exact same phone, the same data terminal, the same service plans. 

So how do you choose a provider?  Lowest price?  That’s risky.  Why not use some rational factors? These may include:

  • How much they know about what they are selling you?
  • What are they selling you – The right solution, the solution du jour, their overstock?
  • Will they take care you after the sale? How do you know?

Don’t get me wrong, I like to save money and pay a little less also, but on low involvement purchases like gas, groceries and clothing. These are things that don’t risk my life if they are not working properly and I cannot contact customer support.  But SatCom – where lives can be at stake – why would you gamble with that?  Remember, ‘Cheap is for a reason.’

So you buy a satellite phone at the lowest possible price from a cheap-o provider.  Great, you saved a few bucks!  Here’s the question: Is the amount you saved worth the risk you’re taking? 

I once posed this question to the purchasing agent who was negotiating a state contract.  His response was shocking and revealing.  “I don’t care, it won’t impact me.”  I agreed with him, affirming that when there was an emergency and his state employees couldn’t get help at 2:00 on a Sunday, it would indeed have no impact on HIS life – he’d be comfortably asleep in bed.  But his short-sighted decision would then be jeopardizing everyone who was using that SatCom service.   He awarded the contract to the lower bidder.

We once responded to a bid where the user specified the make and model of the phone. The buyer (not the user) then added the dreaded, “Lower Cost Technically Acceptable Substitute” meaning she would entertain different solutions if the seller could convince her that it would work just as well. Keep in mind the buyer has no knowledge of satellite phones; it’s ‘just another commodity’ to her.  Sat phones, today pencils tomorrow, trashcans on Monday.

The award went to a provider that proposed a lower-priced solution that didn’t meet the user’s specs so he had to spend 150% of the cost of the phone to ‘fix’ the buyer’s mistake.  They paid the lowest price.  Then they paid the highest price.

We all know that spending less money on something means we will get something less. It is an irrefutable law of business, economics, and life.

So why do continue to pretend that buying at the lowest price doesn’t have a hidden price all its own?  It’s an incredibly expensive way to think.

Thanks for reading!


Five Lessons from A Non-Flight

I was supposed to visit a business partner in the Bahamas yesterday to finalize a training program I will be delivering in January.  Thanks to a series of errors, I never made it.

As our departure time came and went, the Captain announced that a certain maintenance certificate had expired last night at midnight (seven hours previously).  When the maintenance crew came to do this inspection, they inspected the wrong plane so our plane was not legal to fly.  We’d be leaving in about 30-40 minutes.  Excellent! There goes my connection….

I looked up the alternate flights and learned that whatever flight I would be move onto would get me there too late for a series of meetings I was to have in the afternoon.  I opted to get off the plane, take my refund and go home.

With ample time to consider my experience, I’ve put together this list of five things that you must build into your client care process:

1) Planning – How a certificate expires seemingly unexpectedly is baffling.  There are some pretty rigorous standards to fly planes with definite expiration dates that are known in advance.  Given the preponderance of scheduling software (that runs my life), someone must have really dropped the ball.  We know situations change but if you plan your work and work your plan, what could go wrong?  Plenty but at least you are prepared.

2) Accuracy – Aircraft have tail numbers on them and inspecting the wrong plane makes me wonder what the crew was doing right before they inspected the wrong plane.  I have spell check, and people to review my math but this is different – matching numbers and letters ought not be a challenge, especially given that the Manchester, NH is small and there were literally two or three of this airlines planes there.

3) Genuine Care – As soon as the flight attendants heard abut the problem, the drinks cart was out  and they went to work serving us a beverage in an effort I’d imagine to lessen the blow of a delayed flight.  When you come from a place of service, you are strong for serving others is the highest calling.  Granted this was just juice and coffee; it was impressive nonetheless.

4) Compassion – Instead  of the typical ‘we’re delayed, too bad, so sad, bye bye’, the Captain said, ‘I’m sure you’re angry and frustrated’.  By acknowledging the pending anger and frustration, he joined our merry little band of 90 delayed passengers.  He then deepened that by announcing that many of the crew we going home and were not happy about the situation.  If you acknowledge the situation but more importantly the impact on your customers, you defuse the situation.  This ‘we’re all in this together’ mentality, aligns customers and providers together instead of the typical ‘us v. them’ dynamic that can be the norm

5) Accept ‘What ‘Is’ – Sure we all would have preferred that the certificate had been renewed and further that the crew had inspected the right plane, but given the situation, we all had two choices: sit and fume and complain or stay calm and just be.  The woman sitting across the aisle from me was the first to loudly spout about how ‘absurd this is’.  I professed that there was a reason this had happened and another passenger said he’d always prefer to be on the ground wishing to be in the air, instead of the reverse.  Who knows what tragedy might have befallen us all in our own way had the flight gone off on time.  Was this avoidable?  Sure.  Was it mostly incompetent?  Yup.  But instead of getting our blood pressure up and escalating into cacophony of angry complaints, we mostly remained calm. At least that was the mood as I took my bags and departed the plan, went to the gate and got my refund.

The plane left two hours and five minutes late so  cannot vouch for what happened after I took my leave.

Despite the fact that I describe the airline industry as the most customer abusive in the world, this particular flight crew did a great job of caring for us hapless souls on the plane that day.  They take pride in their work and it was refreshing to see.  Not only did I take away these lessons to share, I got a full refund. Imagine that – an airline giving a full refund!

Yes, there many reasons it was a truly anomalous day in aviation history.

Credibility is all about You!

Credibility is defined by as, ‘the quality of being believable or worthy of trust.’ Think about the statement: ‘worthy of trust’. What does that actually mean? Before we answer that, let me back up and explain why I am on this vein of thinking.

Facebook keeps recommending ‘friends’ for me because we have 4, 15, 38, 89 mutual friends. Last week on of these ‘friends’ I don’t really know (but know and respect our mutual friend) started messaging me for no particular reason and then it turned inappropriate she let me know that she was…err….lonely. I recommended a course of action and un-friended her.

The week before I had been visiting a client in London to bid happy retirement to my contact of three years and meet the new person. She was amazed that I flew all the way to London just to meet her. This particular client came about as a result of a new employee who had worked with my company at her last position. She was asked who provides what we do and she recommended us. Instant credibility! Since the meeting in London, I’ve heard from another employee needing to get up to speed on what we do. instant credibility number two! Is there anything more credible than an internal referral? External….maybe.

Last week I met ‘the new guy’ at a company where we have been the provider for nearly 16 years (quick – remember Y2K?). The only credibility I had was the past but since he had no frame of reference, he was a little reluctant to just welcome me with proverbial open arms. This is completely understandable. After we chatted for 45 minutes and ran into my last contact in the hallway – who sang my/our praises –he realized I was credible and worthy of trust. Having studied psychology and sociology (and beer!) in college, I was whisked back a bit to the observation post and mental note taking of how the shift happened. If you are reading, thank you for the reminder that credibility needs to be earned on one’s own merits, not just because as ‘he’s a good fella’ as Henry Hill states in the movie of the same name.

So here’s the question about people or companies you do business with:

Do you trust them enough to recommend them to your family/fiends/colleagues? They will all need to decide on the credibility on their own, but would you recommend them in the first place? If so, great, I recommend you do so – I personally love referrals. But if not….. well, why are you working with them?

If you wouldn’t recommend someone to your trusted circle, why are you continuing to spend money with them? Aren’t there better places that deserve your patronage? I’m just asking.

We all work with certain people and companies for a reason; low price, terms of service, recommendations. You define the credibility equation for you. Maybe one store simply has better pricing on commodity products and you’re okay with the lack of customer support. If it works for you, great; that is your credibility.  And it is a very different credibility criterion than a hand-holding experience you may get someplace else.

Credibility is very personal and that’s what makes it so great – designed just for you, by you.

Thanks for reading!

Who Gets Your Money?

I’m in the market for a new/used truck. I love my current truck – a 2013 Chevy Silverado that I bought used with 300 miles on it – got a great deal, $10,000 off price. I just want to get rid of my payment and drive something that will give me 40,000-50,000 miles. Nothing complicated; 4WD, A/C, cruise, power doors and windows. Just doing some simplification.  

I’ve been looking online and finding exactly what I want within 50 miles is challenging. There are two trucks at a local dealership where I bought a truck a couple of years ago. The sales guys had all kinds of great things to say about the truck back then. Shortly (shortly meaning within a few weeks) after I bought it, there was a problem. Then I got the, ‘Hey you bought a used truck.” scenario. Funny how it wasn’t such a great truck any more. Now I understand that used is used and things happen. But I didn’t bust the drive train inside of two weeks. So $1,600 worth of work later at their shop the problem was not fixed. So another $800 and different shop (‘They fixed the what?’ he asked in disbelief) and I had a great truck and it has run great for four years now.

So back to the two trucks they have for sale.   Either one will fit the bill for what I want. But do I really want to spend more money with them? I was discussing this concept with my son the other day: Problems happen. It’s just a fact of life that things go wrong. Where you learn about people’s character is in how the respond to the problem. In the truck case, the problem was addressed by charging me full price to ‘fix’ something that didn’t actually fix the problem. No apology, no compensation, no accommodation, just ‘You bought a used truck.’

I even brought the issue to the attention of the owner of the dealership. Twice. No response. A business owner receives a complaint and does nothing? Amazing.

So they have these two trucks and I’m not buying either of them. These guys don’t deserve my money.

The woman who sold my wife her car does. So I called her and told what I’m looking for and she is going to find me the truck I want. You see, she wants to sell me 10 trucks, not just the one that these other clowns sold me. They treated me as a one-truck sale and that’s what they got; one sale. And an over-priced repair job. Good for them! They won. But did they? I have a need, they have a vehicle and they can stuff it as far as I’m concerned. There are plenty of places to buy a truck and I can be patient waiting for the right one. They got my money. Once and only once. Never again.

So who gets your money?

  • The one-sale amateurs, the box-moxers, product-pushers, lowest-priced bottom feeders who offer no value whatsoever?
  • Or the professionals that really want to take care of you, tend to you, work with you and for you? These are the ones who prove they want you back.

I know which of these two get my money. Who gets yours?

Thanks for reading!


Why the Quarter-to-Quarter mentality is killing business

I love business, I admit it. Think about this: Everything in your life, repeat everything is the result of an idea that came to life through some sort of business. Whether product or service, someone had an idea and cultivated it to a state of marketability. Some ideas (Uber, Facebook, Amazon) are better than others (feed mayonnaise to tuna fish?) and the market then decides who lives and dies and sometimes the lower quality solution wins out (Betamax anyone?).

However, there is something in business that has bothered me for years, starting back when I was in my early career in the world of financial services. The quarterly mentality. It’s just so, so, so, what’s the word… Ah yes! It’s just so short-sighted. A quarter is 90 days, three months, 12 weeks, a season, barely enough time to implement a plan, let alone see any results.

I was always fascinated by corporate earnings – did they meet or beat last quarter’s 20% annualized growth rate? They came in at 19% and the stock tumbles. Next quarter they come in at 22% and the stock skyrockets. What is going on here? My first thought is, ‘how can a large company continue to grow earnings at 20%?’ And even if they don’t, 19% is still pretty darn strong, so why the sell-off? Do you really wonder where generations get their instant gratification mentality? We’ve conditioned people to expect things to happen now or tomorrow when that just isn’t how things actually work.

There was folklore about Soichiro Honda’s 250 year business plan being laughed about by US executives. I scoured the web and could not find reference to said plan however; I did learn some interesting facts. He started Honda in a wooden shack in Japan in 1948. An idea, a motivated engineer and plenty of initiative, and 60 years later Honda is the largest manufacturer of internal combustion engines in the world. And we all know that everything they build lasts and lasts well. Here’s an fun fact: When Honda came to the US with their motorcycles, the first year was a money-losing proposition. Did they use the quarterly mentality? Nope. They adapted their plan, listened to customers, built what they asked for and within a few years had taken a large share of the market.

So what’s the point of all this? Simple: if you are running a company and you expect things to happen in a quarter and see tangible results, you really need a reality check. Fundamental change in 90 days? Really? That’s barely enough time for your staff to understand, digest, sort and internalize the ‘new reality’. Fundamental change takes more grit than that. It’s funny because people like to profess that change can happen in an instant (note the immediacy). I agree, but maintaining that change is what matters and that takes time, as in long-term.

Think about when you make a major purchase or acquire a new customer or client: do you look at the long-term cost of the purchase? $100 every year vs. $300 every five years? $1,000 profit today vs. $5,000 profit over three years? Which makes more sense to you? Depends how you are thinking doesn’t it?

Long-term thinking wins in the end. Quarterly thinking sets you on a roller coaster. Which can be a great ride if you like that sort of thing. Or end like Enron and MCI.

I prefer to do something more substantial. Why wouldn’t everyone?

Thanks for reading!

Pigs and Popeye as Decision Points

We’ve undoubtedly heard the phrase ‘putting lipstick on a pig’. It’s still a pig. Popeye used to proclaim, ‘I yam what I yam and that’s all that I yam.’ And in Canada, the practice of ‘spocking’ has emerged with the passing of Leonard Nimoy (Spocking is the practice of drawing Vulcan ears and eyebrows on the image of Sir Wilfrid Laurier, Canada’s seventh Prime Minister.

What do these three things have in common? They are all examples of knowing who you are and who you are not. Popeye IS Popeye. A pig can wear lipstick, but it is still a pig. And Sir Wilfrid Laurier is not Spock. Wal-Mart is not Nordstrom’s (one more to highlight the point).

So what, you say? Well, it’s pretty striking to consider that if you try to be all things to all people you will get nowhere. All great companies excel at one of these three things:

  • Operational Excellence
  • Product Leadership
  • Customer Intimacy

(Credit to Michael Treacy and Fred Wiersema, authors of ‘The Discipline of Market Leaders’)

This is WHY Wal-Mart is not Nordstrom’s. Wal-Mart is excellent at operations and distribution and Nordstrom is excellent at customer intimacy. Apple is excellent at innovation and product development. All three of these companies know where they lead and do not try to be anything else.

Having a solid identity is incredibly valuable in this world where the internet has removed all barriers to finding whatever you want.  If you search for ‘satellite phones’ you will find a couple dozen companies ALL selling the exact same thing – all satellite phones are made in the same factory, go through the same distribution channels and end up on the provider’s shelves. Product innovation is out (for basic phones) as a place to base your decision. So which do you want the equivalent of operational excellence, aka lowest price, or Customer intimacy, aka, outstanding support? You cannot have both, just as something cannot be ‘new and improved’ – that slogan has bothered me for years. It is either new, never been here before, or improved, been here before but now better.

Lowest price means your support – if there is any – will suffer. We have a government client that calls us for support due to our knowledge base, and responsiveness.  They lament the fact that ‘DC’ made the buying decision based on the lowest price. The ‘support’ offered is a web page where they send an anonymous message to the company and they rarely respond, certainly not at the time a response is needed – now that’s helpful…..

On the other hand one of our clients was duly impressed that our staff answered personal cell phone calls on a Saturday and came in to the office to prep phones that had to go out that day.

These are two starkly different business models and one will undoubtedly resonate with a variety of SatCom users out there. Here’s the question: Which one is the best fit for you and can you convince your contracting officers, buyers or financial folks that paying the incrementally higher price is well worth the investment?   That debate rages on.

Thanks for reading

As Rosanne Rosannadanna Used to Say….

Yes that’s my tribute to Saturday Night Live (a week late) so next week look for an Oscars reference.

If you remember the glory days of SNL, when they used semi-foul language and off-color jokes, you remember Rosanne Rosannadanna and what she and her mother used to say: ‘If it’s not one thing it’s another’.   Seems totally fitting for our industry.  

This week was the first Monday without a major snow event in New England in several weeks and while it was strange to be at work on a Monday, it is a reminder that there is a ‘normal’. It just may have changed a bit. I was looking at the 2015 hurricane season forecast by Drs. Philip J. Klotzbach and William M. Gray of Colorado State University, perhaps the premier hurricane forecasters in the world. While last years’ hurricane season did not produce anywhere near the predicted activity on the Atlantic side, the Pacific more than made up for the lack of activity. Drs. Klotzbach and Gray have revised their model and this year’s forecast calls for an 80% chance of an above-average season. Click HERE to read their qualitative report. The quantitative report will be available April 9.

It may seem strange to be talking about hurricanes while we are immersed in winter’s grip; record snow, deadly wind chills and arctic blasts. Thankfully this combination has meant that power lines have not come crashing down under the weight of wet, sticky snow or worse, inches of ice. Power and cellular outages mean companies and utilities pull put their satellite phones and scramble to recover. The light fluffy snow this year has meant that has not happened.

Here’s the thing: In a few weeks, the snow will begin to melt and by April or May, it will all be gone. We’ll enjoy the warmer temperatures and (motorcycles!!!) outdoor activities. Then we’ll be into summer and soon people will begin to complain about how hot it is. Remember that now (as you are riding your motorcycle!!!)

As hurricane season comes upon us, those same satellite phones that are sitting idle right now could easily be put into service as a major storm threatens to, or worse, makes landfall. If it’s not blizzards, its hurricanes and it it’s not hurricanes, its tornadoes, and if it’s not tornadoes (insert disaster here). You get the point. As Rosanne Rosannadanna’s mother used to say….

So keep your satellite phones charged, active, tested and train your staff how to use them. You never know when you’ll need to pull them out in response to Mother Nature’s latest curveball – baseball reference intended. How long until opening day?

Stay warm, stay safe.

Thanks for reading!

The Funny Thing about Winter

If you are anywhere in the northeast, you probably want to hit me for suggesting there is anything remotely funny about this winter. 80 inches of snow, below zero temperatures, the wind, the MBTA problems in Boston… Enough you say – bring on Spring!!!

Yeah, yeah, we’ll get there. In the meantime since we are here, now, and there isn’t really anywhere to go (unless you are heading out on your winter vacation), let’s discuss what nine to twelve foot snow banks can teach us.

Number one: Be prepared. Meaning don’t run around like a headless chicken buying gallons and gallons of milk and 17 loaves of bread. You won’t be shuttered away in your home for three weeks. Not unless we get 14,000 inches of snow at once. You are surely wise to have extra supplies –  sweetie pie calls it ‘storm food’ and it always includes Oreos! – some extra batteries, a good radio (for weather and Zombie updates) and alternate power preparations if case the power goes out. Nothing beats good preparation. Except a nice juicy steak. Which is why I always shovel out my grill.

Number two: Relax. The snow storms we’ve seen in the past three weeks have been slow movers, hanging around a day or two to bury us in the white stuff. There is no need to elevate your blood pressure by panicking; plenty of other people will do that for you. Be the calm, cool, collected, rational person in the store and on the street. Snow storms draw out the nutty-heads already, we don’t need any more. Be like the wind and (wait for it!) chill…..

Number three: Be smart. I am bad at this one because I have a big 4WD truck. It’s hard to sit home while the storm rages; actually it is pretty easy.  But I am an explorer at heart – I want to see what is happening out there, especially down at the beach where you can see a very, very angry ocean. Even as hypocritical as it may be, if the governor asks you to stay off the roads, stay off the roads. Especially if you are driving a little car with no weight and six inches of ground clearance. I’ve pulled a few cars out of snow banks over the past weeks and some of them have sustained damage; apparently snow that falls in 10 degree weather is light and fluffy until you hit a pile of it that has mixed with road salt and frozen into chunks.

So there you go, three hot tips, pun intended, for winter survival. So where’s the funny part, you ask? Simple: its winter, it happens every year. Sure most years are not like this one, but the general principles apply: It’s cold, it snows, and it’s windy. That may not have changed since the ice age and back then it was worse! And every big storm, I mean EVERY big storm brings out behavior that is directly contrary to what I’ve written above. People panicking, doing stupid things and cleaning the grocery store out of food that they will never be able to eat before it spoils.

I’ve seen this is SatCom as well. Hurricane season will be here soon, and yet people will not make good decisions to ensure they have satellite phones. Nope, they’d rather roll the dice and then call us as the storm bears down on them. Been there. Done that. Bad planning.

At least spring will be here and the snow will melt. Certainly by June.

Thanks for reading.