What’s the big hang-up on price?

I’ve been in this CI game for a while and, while I don’t pretend to know everything, one thing that always gets the hairs standing on the back of my neck is, “Can you get me the price for product X?”

My standard response for this question, as for any other CI request is pretty standard.

If I can find this information for you, what benefit and what business decision will this information drive?

Funnily enough these kinds of questions fall into what I like to call “Treadmill” questions. That is questions that are a constantly moving target and very rarely add significant competitive insight.

Price, especially in the IT & Software markets is a unsustainable competitive advantage. In Asia Pacific, the notion of price is extremely elastic – with list prices being artificially increased to offer larger and larger discounts. Discounts gained serve as a key metric of success for many buyers of IT.

Often, the answer to my question is merely for interest or to get a feeling for the affordability of competitor solutions.

I’ve done a lot of work with my stakeholders and team, educating them on what makes up competitive advantage from a buying perspective. These include, but are not limited to:

  • Standard levels of discounts.
  • Licensing differences (perpetual, upgrade, renewal, etc).
  • Levels of bundled software support and maintenance included in that licensing.
  • Channels to market and the unique value that is offered (Systems Integrators, ISVs, Resellers, etc).

If you take this to a deeper level, for particularly strategic decisions, price becomes just one aspect of buying behaviour. Is the question you need to answer not about your competitor’s pricing, but rather, where does pricing lie in your customer’s buying decisions. Know that, and you will have the insight you need. Insight to lead the market, rather than follow.

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One thought on “What’s the big hang-up on price?

  1. Dan,

    You make great points about price being a component of value and not the ultimate buying decision.

    How do you go about measuring the position of price in the value equation? We at Primary Intelligence use interviews, analysis and predictive analytics to help our clients answer this question, but we’re not everyone’s cup of tea.

    Maybe, you could present some ideas in a future post to show your peers how this can be done with in-house resources.

    And, if I’m not overstepping, I might recommend a couple of posts that deal specifically with this topic: Using analytics to move past the SWOT, It’s Not About Price

    Thanks again for your great ideas, Dan.

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