In pricing guru Reed Holden’s latest newsletter and blog post, he drives home the point that while IT buyers tend to look like are buying on price they really are not. They just use low price providers (rabbits) to drive down the prices of others.
The way to call them on this is to offer options, including a bare bones option. Once the prospect reject the idea of the lowest price, they are no longer a price buyer. We need to call them on this.
Also, IT providers need to lead with a strategy of distinguishing themselves as knowledge firms, not service firms. This means positioning themselves more like insurance companies do. With insurance (healthcare excepted, but do not get me started), we pay for things we do not want. With IT, we do not want problems.
Recently he participated in an UnConference of FileMaker Pro developers and consultants. He has been kind enough to share the video of his presentation. I think you will agree that Kirk did a great job. Here is his introduction to the session:
At DevCon 2009 I participated in a business panel discussion as an advocate for hourly billing. Since then I researched value pricing and found it to be superior in several ways. Would you like happier clients? More profitable projects? Less administrative burden? I’ll explain why I have adopted this model for my company and what the advantages are. Also, I’ll address the different challenges implementing value billing for a sole proprietor vs. a company. I’ll show how I have adapted it to our company including an overview of the sales and proposal process. One thing I have learned and am anxious to discuss with the group, is whether you use value based billing or not, thinking about it will improve how you do business.
I am so opposed to billing by the time unit, that I refuse to pay the $0.50 for those two minute mechanical rides to nowhere near shopping centers.
In this video, you see how my kids completely enjoy themselves (effectiveness) even though the ride never moves at all (not efficient), plus I don’t pay anything!
As an added bonus they make their own sounds and it qualifies as creative play!
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