Investigators: Beware of "Grouponing" Your Agency

Why offering rock-bottom prices and saying “yes” to all jobs are not good long-term strategies for building a healthy investigative business

Earlier this year, I wrote about how fly-by-night online background check companies are driving down the market for our services as investigators and lowering expectations about what constitutes a professional background check.
In this article, I’ll talk about the dangers of offering low low prices to lure in new business, and how sometimes, there are very good reasons for saying “no” to a client who wants to hire you.

Blue-Light Specials

There are plenty of good reasons for offering the occasional discount to a well-established client. It’s one of many tools for maintaining strong relationships and letting loyal clients feel like VIPs. But such perks should never be used to lure in new clientele.
In fact, I’d argue that offering steep discounts as a method of building a business is destined to fail. Not that you shouldn’t offer a special price to bring in new business on occasion; but if you romance the client with rock bottom prices from the very beginning, where is the incentive to pay full price as a repeat customer?
The expectation of fast, cheap, and free is killing our industry. From bargain-basement backgroundchecks.com-style sites to a new app in development that will offer on-demand investigative services for a set fee, there are a lot of pressures driving down the market for our services.  We need to find a way to push the market in the other direction.
[quote align=”center” color=”#999999″]We have to decide that we’re worth more before we can convince the client of the same.[/quote]
It starts with us. We have to decide that we’re worth more before we can convince the client of the same.
Groupon is a prime example of failed deep-discount marketing. “Groupon was obsessed with growing as fast and big as it possibly could,” writes George Roberts in Business Insider in 2013, “a business model that is just about anything but profitable.”
Roberts suggests that Groupon’s big mistake was focusing more on bringing in new customers than on keeping the ones they had. “Building a sustainable business is a marathon, not a sprint,” he writes.
Cheap and free are easy sells, but they are not strategies for building a healthy business in the long term. We have a false concept of what it means to compete. Thrift has its benefits, but not when customers expect maximum quality for minimum cost.
To earn clients’ long-term loyalty, we need to offer a great service for a fair price. A good repeat customer will be happy to reimburse a fellow professional fairly for an excellent product and reliable results. And if a client isn’t willing to pay for good work, you should probably consider ending your business relationship with him—because what he’s communicating to you is that sees you as a commodity, not as a professional.
Never devalue your product in the customer’s eyes. Ever.

It Pays To Be Selective

There are worse things in the world than turning down work.
I know—I just lost some of you, but hear me out: Saying no to poor business practices sometimes means turning away potential clients.
I’ve had to learn this the hard way: Not every business relationship is a good fit. When all a potential client wants is surface information easily gathered by Google, then they really don’t need my services. In those situations, I often politely decline to take the case. Why? Because we’re known by the company that we keep, and that applies to clients as well as personal associates.
Standing out from your competitors should never be defined strictly in terms of dollars and cents. If the only thing that sets you apart from the competition is price, you need to seriously reevaluate how to improve your product—not just for the sake of your reputation, but for the industry as a whole.
The best way to grow your business and to change the investigations and security industry for the better—by raising our value in the eyes of the public—is to offer an excellent, professional product for a reasonable price … and to decline to work for clients who ask for anything less.

See also:

Knowing Your Worth in a Bargain-Basement Market
 

About the Author:

Amy_photoAmy Lynn Burch is registered private investigator in the Commonwealth of Virginia employed by various agencies in the Virginia/DC/Maryland area. Amy is also a sexual assault advocate who devotes her time pro bono to victims of assault and those falsely accused of sexual crimes.
Amy is a mother of three, a freelance writer, super-secret ninja, cat whisperer, perpetual college student, would-be foodie, and obsessive gardener (even though she has been known to kill plants). She is regularly unseen by the general masses and could very well be right on your heels. Follow her on Twitter at @Amy_Burch.