Prakhar P. Shrivastava
SLS, P. Surv.
Price War – Good for Oil Barons, Not for Surveyors
At the time of writing, spring is officially here; but if you are residing in Saskatchewan you wouldn’t think so. There’s been a constant tussle between spring and winter over the last few weeks; hopefully, spring will bloom … soon enough.
Most of us have had a quiet winter in Saskatchewan on the work front after a busy last year. With the oil prices tumbling and the economy gurus not showing the green flag on recovery, it certainly gives us all time to catch up on those old plans, clean up our offices, meet our valued clients and “introspect”. The last time things were slow in the surveying industry, I was still in university. It’s been an interesting firsthand experience this time around!
Surveyors are part of the service industry, offering surveying services and expertise to meet the customer’s (our clients) needs. Over the last few months there has been fierce competition among survey firms over cost of services. This has translated into a general reduction in our service rates across the board. Each of us has something unique to offer to the public by way of service or expertise and our range of costs in a normal year reflect that. The customer must decide what their priorities are. A customer is always on the lookout for best deals. Who wouldn’t want to steal a deal on RedTag!!
And then the part about “introspection” raises a question – are we devaluing our own services by reducing our rates; sometimes to please our long standing clients and other times to get a competitive edge?
We are professionals providing a valued service. I have never heard of engineers, doctors, lawyers or accountants reducing their rates. When other professionals don’t, why do we? A gallon of milk still costs the same, as does my water bill. My cleaning lady continues to charge me upwards of $40 per hour! When the going gets rough, cut throat competition and a price-war are also detrimental to our services and professionalism.
Now, we could argue that the aforementioned services are possibly not quite affected by the downturns in economy the way we are. But at the end of the day, surveying services are indispensable in any economy. The volumes may be lower in slow times, but there will be sufficient work for each of us. If the surveying profession is willing to hold its ground and put a premium on the services we offer, clients must ride the cycle with us. A touch simplistic – perhaps!
A colleague of mine often refers to the ‘Services Triangle’ with the sides being Cost, Service and Quality. Simply said, the cost should be reflective of the quality and service provided. We should be careful when reducing our service rates, competing unnecessarily, where we may be unknowingly cutting corners to remain profitable. Can we really guarantee high service and high quality while simultaneously reducing costs? By no accounts should this be deemed as price-fixing. Our professional ethics require us to receive fair and just compensation for the services we provide to the public and standby to protect their interest.
For the sake of argument, ignoring the seasonal variance, a typical survey project will require almost identical field efforts, comparable computing and drafting input, and consistent professional supervision. Succumbing to competition, when we receive lower than fair and just compensation, are we not redefining what is fair and just? Some would argue, when the survey industry gets busy, their profit margin grows – it is demand and supply after all. A regulated profession like ours is not governed by demand and supply rule. We are not in the survival of the fittest mode, so why fiercely compete?
Competition can be healthy and a way to ensure survey firms are providing the best value for money to their clients. We have a statutory obligation towards the public and our actions today may have implications years from now!