‘Marketing for IT’ Advice: When Negotiating IT Agreements, Sacrifice Some Provisions!
Haggle Tips: Built-In Wiggle Room
Marketing for IT should incorporate a price that clients see, but it shouldn’t be the price you intend to sell service at. You want a competitive price, but you want a price that’s higher than your ultimate intention. Here’s the deal: you’re going to have certain standardized services which are worth promoting publicly. But other prices will be on a per-client basis, because the extent of services differs per customer.
When you’ve got a client on the line and you’ve decided on what the profitable cost for services is going to be, what you want to do is start negotiations about one or two levels higher than you intend to close at. This gives the client the opportunity to pitch a lower price at you and gives you the opportunity to lower your price in order to meet their needs. Ultimately, it appears as though you’re ready to change your service delivery arrangements in order to meet client needs, which further satisfies the client.
The Low-Ball Bid
Be prepared for the client to low-ball you. As an example, the monthly cost for full maintenance of a particular client— including on-site delivery, proactive monitoring, upgrades, backup, security, and a dedicated staff member— maybe something like $5,000 a month. Say $5k is the number you’re planning to settle at: sell the services at something like $5,700 a month. The client will likely pitch you something like $4,800. Then you can come back with $5,300, and the client may say something like $5,000. You shake hands— or fire off an email, whatever the case may be— and the deal is made.
Now, if your marketing for IT is promoting prices that are set in stone, you’ll likely actually lose some clients. They’ll feel as though you’re like those multi-national corporate options that treat clients as statistics because they can, and are cumulatively unwilling to negotiate. Additionally, when you have negotiable rates, you appear to be a more reasonable solution.
Something else to consider is that you should be prepared to go a little beneath your target cost in order to retain clients. This is because you’re also going to get some clients who will pay the inflated fee simply because they’ve been conditioned to. What this means is you get to have your cake and eat it, too. Clients who aren’t savvy won’t try to negotiate, those who are will. Between those that undercut you and those that let you overcharge them, you’re likely to make much more on an annual basis.
Additionally, for those clients who pay too much, you have the option of offering “promotional discounts” based on unexpected “ease of delivery” conditions. When you can do that for a client who didn’t haggle with you, they not only feel very special, but they’re likely to become a loyal customer— and for good reason! You just dropped the cost several hundred dollars when you didn’t have to simply out of “the goodness of your heart.” You see how the mental narrative is? The important thing here is that perception of potential clients is one of the most important factors to consider when you’re selling your services, and when price comes into the equation.
Ensure You’re Subtle
But don’t make it too obvious. Another thing you can do is add provisions into your services model which you can easily “sacrifice” to meet the client’s budget. There are certain services that would be good for clients to have, but which they don’t strictly need. Package those in, and pull them out when the need arises in negotiations. Altogether, some good selling strategies include:
- Not marketing prices that are set in stone
- Presenting clients with service figures that are negotiable
- Expecting and allowing under and over bids
- Including reducible features in service delivery packages
Selling is every bit as strategic as, say, a game of chess. With chess, you’ve got to think several moves ahead. The further you can out-think the client, the better your sales will be and the more satisfied your clients will be. You’re killing two birds with one stone. With all that in mind, you should structure marketing for IT so that you’ve got some “wiggle room.”
About our Contributor
Nicholas Fortin is the President and Owner of Nexxen Technologies, which provides IT Support in West Palm Beach. With a wealth of experience in the IT industry and a very real sense of what it takes to run a successful business, he is the ideal person to help their clients achieve more through a more efficient use of technology. Nicholas is well versed in the management of computer networks, IT Infrastructure and Operations Services (IOS), as well as in IT security best practices, due diligence, PCI-DSS, SOX, and HIPAA compliance. Nicholas is justifiably proud of his ability to establish and maintain excellent working relationships, not only with their clients and vendors but with his co-workers too. Their 98% customer retention rate is a source of pride to everyone on the Nexxen Technologies, Inc. team too!