If you thought it was hard to sell support a year ago, you must be feeling a little down today… Here are some ideas for pricing and selling support in a downturn.
Give the customers choices. Customers are human beings: if they feel they are being forced down a unique path, they are more likely to ask for special conditions, such as a better price. Giving them options puts the decision power in their hands. (I’ve noted before that too many options have the opposite effect, so don’t go overboard.)
Be cautious about price hikes. Clearly this is not a good time to raise prices, even if you haven’t done so for the past several years. I would avoid across-the-board hikes, but you can continue to raise prices for customers that are “catching up” from a highly-discounted price, especially if they have been aware of the adjustments.
Demonstrate value. Each feature of your support offerings must be associated with clear benefits from the customer’s perspective. For instance if you are bundling free training with your support offerings but your customers are specifically forbidden from travelling the lovely free training may not be so attractive. Know your customers.
Train the sales reps. It’s very hard to be selling during a downturn, and it’s very tempting to give discounts in an attempt to make a sale, any sale. Many sales reps don’t know much about selling support and will easily fall on the easiest trick in the book, discounting, when it comes to support. On the other hand, a well-trained rep is able to communicate benefits to customers and match them with the program they need and can afford — sans discounts.
Review the discounting policy and discipline. As we know, support commitments last a long time, so discounting upfront will mean years of misery on the delivery side, so hold the line — firmly — on discounting support. Better give some ground on product or throw in a short-term concession.
Do share what you are doing with support pricing in the current economy.