You had me at ‘vendor’

I received a phone call yesterday from a large financial institution customer. Actually this was the IT Department  servicing the customer.

Within the first minute on the phone they told me I was their ‘selected vendor’.

Within the next 15 seconds I knew I didn’t want the work – which over the next three months might have been $ 8,000 to $ 12,000.

The problem?

I’d proposed on this work three times over the course of the last year and one-half. Each time the proposal had both an expiration date and a timeline during which the work could be performed. Each time this customer (or more truthfully their IT department) ignored the proposal.

When they called yesterday, announced I was their guy,  and promptly asked for a meeting I provided them with an updated proposal and explained that pricing had changed because the time period from December to February is our busy time.

For our firm pricing during the high demand season rises accordingly. We do not allow customers to price a project during the slow summer months and then ask to bring it into the busy calendar year end closing time without being paid a price premium.

This might sound a little self-righteous – but the above pricing has kept me out of trouble for 25 years – during which time I’ve seen plenty of other VARS chase every piece of business they could find – and turn right around and go out of business or be sued for taking on work they didn’t understand.

Here’s How My Pricing Was Updated

In response to their sudden interest in re-kindling our proposal I provided new prices as follows:

If the work needed to be done within 5 days (as they stated it had to be) and prior to 12/31 – the pricing was going to be 1.5 times our original quote.

If the work needed to be done in the busy but saner January timetable the premium was only 25%.

If the customer could begin the work in February the price would remain the same.

Their choice.

What Did They Choose?

After  sending the updated pricing the customer called back. They wanted the services outlined in option one (meet immediately) with the price of option 3 — less $ 500.

I thanked them very much for their inquiry and offered to help them find another partner.

Two reasons I don’t engage in pure discounting of prices:

  1. When you discount you’re telling the customer you lied about the price – and the price you gave them was really not the price at all.
  2. Once a discount customer – always a discount customer. Try this sometime for yourself and see if I’m not onto something here.

I find these types of pricing disagreements rarely happen when my contact is someone within the accounting department.

However when dealing with the IT departments I find the price is much more of a factor and also the scope of work when generated by IT is often ill defined and may not even be possible to accomplish using the solution or skills I represent.

For these reasons I won’t engage in discounting or in taking on projects where I’m unsure that the customer really knows what they want and has documented it thoroughly prior to beginning the project.