Where The Prices Are Insane! July 10, 2009Posted by Chuck Musciano in Leadership, Technology.
Tags: Customer Service, Software, Users
It happens four times a year, like clockwork. Just before the end of March, June, September, and December, the phone calls and emails flood in, all promising the same thing: unheard-of pricing on products you absolutely cannot live without. These once-in-a-lifetime prices are only available for a short time, if you act now!
What’s being sold at immense discounts? ShamWow or Snuggis? A Pocket Fisherman or a 12-CD set of the greatest hits from the 70s?
Nope. The big sale is on software. Big software: databases, ERPs, business intelligence platforms, and the like. Even with the fabulous discounts, the prices still run well into six figures, plus implementation costs.
Who buys software like this? Is there a CIO anywhere in the world who will write a check and buy software at the drop of a hat?
Done correctly, big system purchases take a long time. Requirements analysis and market evaluation are tedious but vital to ensure a good fit for your organization. Understanding the deployment costs and timeframe is crucial for success and can takes weeks to figure out. Just reading and negotiating the support and licensing contracts is a major exercise all by itself.
Moreover, as CIOs work to gain the respect of their executive peers, the last thing any of us should be doing is running to the CFO’s office on June 30th, looking for a signature to close a deal before 5 PM. Rushing a deal to save a buck is unprofessional, and any other C-level executive should question our abilities if we behave like that.
That isn’t to say that I don’t appreciate a good deal. But the right way to approach a quarter-end discount is to start working towards it at the beginning of the quarter. Everyone on both sides of the table knows that pricing gets tighter as the quarter and year ends. By doing all the heavy lifting well before that time, we can focus on solid price negotiation without being pressured to short-circuit our diligence when things go down to the wire.
I really appreciate those vendors that come to me well in advance to put together a great deal with plenty of time to spare. Not only does that let me do my job on my side, it also lets me manage the process with my management team, giving them plenty of time to learn about the proposal. When I do go forward with the final pricing at the end of the quarter, there are no surprises to delay the process. By helping my company reach a good decision in a timely fashion, a vendor makes themselves (and my team) look good.
Selling is about relationships and providing solid value over time. Vendors, please leave the high-pressure tactics to late-night TV ads and used car lots, and give your customers time to evaluate and respond to good offers in a timely fashion. We’ll all close on more deals with a lot less stress.