How To Do Pricing Right: Price Promotions

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Nov 142010
 

Customers typically use reference prices when making purchase decisions. It is very hard, if not impossible, for anyone to assess the absolute value of a product, service or solution. Therefore, customers compare the price with alternatives. Such alternatives can be other methods of solving the same problem or they can be competitive solutions from other vendors. But customers also compare prices with previous prices, special prices or standard list prices. Therefore, once you set the right pricing based on the value of your product, the question is if new customers can be won and revenue can be increased by offering price promotions (also called price frames). There is an interesting study by the US Office … Read more

The Buying Center

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Oct 152010
 

When you sell to a business customer, you don’t sell to a single decision maker but to a group of people, the so-called buying center. The buying center usually consists of all persons that are involved in the purchase decision. These are mostly the people responsible for the business area that your product addresses. The buying center can include, but must not necessarily, the Chief Executive level of the company. In my experience of selling cloud products (and really, in high-tech software sales there will be nothing else pretty soon) I identified four key buying influences: Product management The technical buyer The economic/financial buyer The buyer representing the customer (if that is not product management) … Read more

Sales Outsourcing – When It Works (And When It Doesn’t)

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Aug 292010
 

Sales Outsourcing is something many start-ups have heard of and might consider as an option. The decision is not as easy as it seems. As everyone knows, the general rule is to only outsource functions that are neither your company’s core competence nor key to its success. But really, which corporate function is a core competence in a start-up? This article is trying to help making the right decision about Sales Outsourcing. If we look at definitions of outsourcing, they mainly focus on either one of the following criteria: Contracting out the task Having the task performed outside of the company Both criteria do not really seem to capture the main issue. The mere development … Read more

Net Neutrality – Yes or No?

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Aug 082010
 

As rumored this week, Google and Verizon are close to reach an agreement that would allow Google web traffic to be prioritized by Verizon. Since carriers and network operators have been re-enforcing their activities to get Internet content providers like Google, Yahoo, etc. to pay for the usage of their network, the discussion on the so-called Net Neutrality has risen again. In general, Net Neutrality means that carriers, network operators or in general Internet access providers (and not, as often stated, mere service providers), which provide users access to the Internet, should treat all content equally in terms of access speed and load performance. (Note: To make my point clear, I will use the term … Read more

Cloud Selling

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Jul 172010
 

As mentioned in my very first post, the ways software is sold also has changed with SaaS and cloud computing. As some guys, like Oracle’s Larry Ellison for example, pointed out, delivering software as a (cloud) service has been around for quite some time. But now the difference is: SaaS or cloud computing is the predominant method of providing software and not just an alternative way. Nearly every decision on purchasing or upgrading business software (we are not talking operating system software here, not yet at least) will consider sourcing it as a service. But again, what is cloud computing? Have a look at the following video for a pretty good introduction. It is 4:52 … Read more

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