Business System Consultation Center - Our Business System ColumnVol.42 2014.05.01 Takahashi Minoru

Never tell a system salesperson you don't know market pricing

Thank you for your interest and continued support.
This is Takahashi from the Marketing Plan Research Laboratory.


While off-the-shelf package systems for tasks like attendance management are one thing,
but for systems built on a semi-custom or fully custom basis,
it’s very difficult to gauge the “market rate” or “reasonableness of the price.”


That said, it’s not a good idea to
is not advisable.
Since they fully anticipate such questions,
they’ll likely respond with pre-rehearsed sales pitches,
and, in the end, you’ll likely be pressured into making a decision without really understanding the situation.


To avoid paying unreasonably high fees,
rather than asking the salesperson that question,
company presidents need to arm themselves with their own strategies.
Here are some examples for your reference.


① Ask other system vendors
⇒ Obtaining multiple quotes is an effective way to understand market rates.
　　Even if it’s just to use them as a benchmark,
　　and gather pricing information from multiple system vendors.
　　(※ Please refrain from disclosing quotes or their contents to other companies,
　　　may violate terms of service, contracts, or subcontracting laws, so it is best to refrain from doing so.)


　　One important point to note is that
　　　　please make sure to “obtain a formal written quote” rather than just “asking for a verbal estimate.”
　　Sales representatives may
　　may quote an unreasonably low price,
　　which can actually distort your sense of market rates.


② Ask about future costs now
　　When obtaining a quote,
　　it is also effective to request
　　in writing.
　　Since no one can predict the future, this has no legal binding force,
　　it is entirely possible to apply pressure
　　while still applying sufficient pressure.


③ Proactively propose a fixed price
　　Before the systems engineer provides their initial quote,
　　it is also effective to share your perspective on market rates.
　　　・Price lists for other companies’ software packages
　　　・A firm price limit stating, “Our budget ceiling is this much”
　　Regardless of which of the above approaches you take, even if they lack precision or validity,
　　it will likely have a significant impact on the initial quote.


That’s all.
That's all, Thank you for reading.

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