A few weeks back I wrote a post about Pricing Your Managed Services Contract and I had a few people reach out with some comments about how they disagreed with my last bullet, “What will they pay for the service?”. One comment in particular stuck out and I posted it below:
Ken brings up some great points but it reminded me of one particular incident that I wanted to share and why I stick by the recommendation. Several years ago when in the final stretch of a negotiation with a new prospect we were getting ready to present the contract. The client had 9 users, 3 servers, 1 location, and all Microsoft applications with 1 unique application. We were all set to come in at $2,500 which was our minimum.
In the final prep meeting with the client I asked “what are you willing to pay for the service?”. The COO responded with “we are paying $3,300 right now and your service seems to be more complete”. As we wrapped up the meeting I told the COO “we should be able to come in around $3,225 for everything we talked about.”
It was a tremendous victory for our team because we got a lot more for the monthly contract and our customer was happy because he was able to get more value for a slightly lower fee.
So I stick by my recommendation to always ask the question…