recession

Did you know that August employment losses were in the formal sector, which shed 14 382 jobs? Does this mean we are in recession? Apparently we are not -South Africa’s economy avoided slipping into a recession in the second quarter, as solid growth in the agriculture and financial industries outweighed a hammering in the strike-hit mining sector. And yet in the wedding industry we are starting to feel the impact of economical instability. Out of  14 382 people who lost their jobs, some may had plans to get married. Most corporate organisations cannot guarantee bonuses to their existing employees simply because companies are watching their costs very carefully. Financial sector is hugely affected by the African Bank debacle. In a nutshell, this means less money for the wedding industry. Weddings are a luxury, and when it comes to luxury, nobody needs any of it and because of that it is the easiest place for people to cut back when times are uncertain.

Wedding people don’t usually bother with economics, but we do notice when flower pricing double in just a few months, or food prices sky rocket, when we have to increase salaries because our staff cannot even afford to travel to work. The clients are coming in with smaller budgets and bookings are not as frequent as we would hope for and we are looking at lower profit margins.

We all know that weddings will still happen, and somehow we need to continue delivering wedding related services, products and experience with limited resources. This doesn’t sound too appealing especially given all the gorgeous and rather expensive inspirational images presented to us by the Pinterest inspired brides. Then throw in emotions people feel when they realise that what they want and what they can afford are two totally different weddings.

So what do we do? The key is to react and not overreact.

Often creative business overreact to the impending recession by running sales and launching inexpensive versions of their expensive products or giving away service/time/reseources.  They drop prices and even work at a loss. A bespoke service should never, ever change its high-end position and devalue their product. At the same time, creative businesses need to take pause and look for ways to align their products with the changse in world around them.

During tough economic times the luxury market becomes highly competitive. As demands for services lower, companies feel they need to show value to the customers in order to stay relevant. To drop the prices does not make sense because loosing money is not an option especially in near recession times. If you are giving away additional time or resources to the clients (such as discounting decor or giving decor for free) you are hurting your company because if that stock gets broken/lost you may not be able to replace it. The focus should be on finding a win-win solution. The couple needs to have the best possible wedding for their money and a planner/stylist suggesting creative solutions such as week day wedding in winter more modest venue choice with smaller guest list, smaller styling scope to make their budget work. It is not the same as client demanding high season Saturday wedding with all bells and whistles in a 5 star venue with a guest list of 200 and prepared to pay only the cost of the wedding and not service charges associated with producing a wedding of this calibar.

In the wedding business it is so important to be able to have difficult money conversation with your potential clients upfront. There is no use dancing around the issue of “how much?”. Tell clients how much, upfront, be honest and then ask them for honesty too. If I know a client’s true number, I can get creative and find a way to make their budget work. Be firm. Do not feel guilty. When you go to the flower market to buy flowers you don’t get a discount, so why would you offer your client a discount on that item? We pay market related prices when we shop for raw materials. Same goes with deliveries – you have to pay for fuel, insurance, driver and even tyres if those blow and do you get discount on any of those items? The list goes on and on. Running a wedding business is costly and we don’t get discounts from companies that provide us with communication, internet, software, hardware.

As a wedding professional I am growing increasingly tired of how ‘shocked’ people feel about the pricing of my company’s wedding services. I am growing more and more  frustrated when couples do not want to reveal their budgets, ask for expensive options and then tell us we are too expensive. I confident that the prices we charge are in line with the standard of the weddings we produce for our clients. No one can create a wedding without resources. If I know what resources I have upfront, I can suggest appropriate options to the couple.

If clients are on the budget then they need to lower their expectations, stop being emotional over what they want over what they can afford, cut the guest list or save up. Wedding companies cannot continue subsiding weddings through overinflated added value and still deal with ‘shocked’ brides who do not appreciate the value they are getting. For some reason wedding people feel bad about charging market related costs and willingly give away their resources and knowledge for free to keep a client happy. It is important to keep clients happy, but clients who are paying a market related price for your services and products deserve this treatment.

Yes, weddings are expensive and yes economy is not great, but we need to enter into a partnership so that a client gets a great wedding and we, the wedding professionals, get paid for the part we play in their wedding. This too will help to reduce the risk of recession as wedding professionals can become viable economic participants.

Eve
Eve
http://www.evepoplett.com

Leave a Reply

Your email address will not be published. Required fields are marked *

sixteen − twelve =