Kaseya Community

Competitors Grossly Undercutting Project Prices

  • We have experienced customers handing our detailed Project Quotes to competitors with a “how much can you do this for” proposition. Inevitably, the customer comes back to us with a one page quote from a competitor grossly undercutting our price without having to do the diligence and specification research and development we did in producing our original quote and project scope.

    How are MSP's dealing with competitors grossly undercutting project pricing in order to get in a "new business" door?

    Legacy Forum Name: Competitors Grossly Undercutting Project Prices,
    Legacy Posted By Username: ccandela
  • The problem is simple. No one services provider is right for everyone. Some will always look for the lowest price and refuse to compare the offering differences. Some will not understand the the offering at all. Some will try to get you to completely customize your offering for them. Everyone is different and that's the big challange. So you have to review and ask yourself was this customer really a good fit? Sometimes not getting the customer is much better then beating your head against the wall because you can't make any money on the customer you never should have taken at all.



    Here's another thread with some other comments:

    http://community.kaseya.com/xsp/f/114/t/4849.aspx



    Matt

    Legacy Forum Name: MSP General Discussion,
    Legacy Posted By Username: connectex
  • qualify your prospects better so you arent wasting time on people who will not value what you bring to the table.

    Legacy Forum Name: MSP General Discussion,
    Legacy Posted By Username: saybrook
  • We have this problem with even a couple of our 'A' clients. They like to compare our quotes with the little PC shop down the road that sell gear at next to cost price. This is especially the case in recent times during the recession.

    The only way we have found to get around this is to be a bit vague in our quotes, for example not giving product codes or exact specifications. Basically making it harder for competitors to match the product we are selling.

    Legacy Forum Name: MSP General Discussion,
    Legacy Posted By Username: lansoft
  • It sounds like you're selling product, not value.

    Project quotations should state the existing conditions, the business opportunity and the high-level work needed to reach the goal of the project, how project success will be measured and the cost to achieve this success criteria.

    Once the quote is signed, then you provide a more detailed explanation - the nuts-and-bolts view.

    Remember to emphasize the value of the project and how it will positively affect the client's business while reducing risk.

    Legacy Forum Name: MSP General Discussion,
    Legacy Posted By Username: DPorter
  • If you are selling hardware and software, you will be very much subjected to this type of thing. Just about everything you sell them is immediately available for a price on the Internet, and usually cheaper. We've had some even compare with the wrong currency.

    I think most of us are focused on selling our services and knowledge which is much harder for the small shops selling hardware to compete with.

    We don't go into details on hardware/software specs but we do provide a lot of details on what we do and can do and especially what the package as a whole can do.

    Those that have tried to match us in capability have had to add bigger dollars because it's pushing them beyond there normal capabilities.

    Legacy Forum Name: MSP General Discussion,
    Legacy Posted By Username: doug.jenkins@ispire.ca
  • You'll never win competing on price - everyone loses on a race to the bottom.

    Couple of ways to handle IMO:

    -ask the client if they already have competing quotes upfront, get copies if they have, that way you can determine if you're going to make any $$$ before doing any work. It's likely that if they already have competing quotes then they're just shopping on price at this stage anyway.

    -charge the client for a technology plan, it strategy or it audit doc which covers the cost of preparing the docs. This can be a small nominal sum, ~$1k for small clients, upto $5k for big clients. This could be combined with a credit upto the same value if they go ahead with the project.
    At least by using this method you're making $ if they go ahead, you give them incentive to go ahead and you're also filtering clients who wouldn't commit anyway - if they're not willing to fork out a small amount for getting the job done properly then they simply don't value expertise and are not an ideal client for you.

    -get better at selling! Get the top 1-2 books from amazon on sales & marketing and get better at it. Price shopping and querying from clients is never about price, it's always about value. They want the best value for their dollar regardless of what that dollar value is. If you can find ways to tangibly or intangibly increase the value they get without sacrificing your margin then you're more likely to win the sale

    Legacy Forum Name: MSP General Discussion,
    Legacy Posted By Username: tbone2345
  • Where we have customers who want a quote and are price shopping we tend to quote a "package" for those that want a quote without a breakdown of details.

    We hand them the "quote" and go over the details but never leave them.

    We will also charge for a quote with tire-kickers who are not our customers or not on our full plans. We give them credit if they buy from us for the value of the quote.

    I agree with tbone, we dont waste too much time with people who shop on price. We dont go to sell hardware, we go to sell services. We only sell hardware after they are on our services and not the other way around.

    Legacy Forum Name: MSP General Discussion,
    Legacy Posted By Username: Mark Shehan
  • Mark Shehan
    Where we have customers who want a quote and are price shopping we tend to quote a "package" for those that want a quote without a breakdown of details.

    We hand them the "quote" and go over the details but never leave them.

    We will also charge for a quote with tire-kickers who are not our customers or not on our full plans. We give them credit if they buy from us for the value of the quote.

    I agree with tbone, we dont waste too much time with people who shop on price. We dont go to sell hardware, we go to sell services. We only sell hardware after they are on our services and not the other way around.


    ^^ This

    After having lost a couple of bids on equipment sales after being underbid by others, we've stopped listing specifics for a project that we know goes out for bids ... Even if we lose the bid, at least we didn't give away the secret sauce...

    Legacy Forum Name: MSP General Discussion,
    Legacy Posted By Username: Lmhansen