We have all been there: you work with a potential client over a few weeks through a series of meetings, telephone calls, online questionnaires, maybe a rough order of magnitude which becomes a statement of work and maybe you even gave the client a half day discovery workshop to bottom everything out into a final statement of work ready for final review and signature. You send the SOW over via email or DocuSign, awaiting the client's signature, and turn the provisional kick-off date into a reality as you do your best to manage your professional services team bench.
Then, like the Bjork song – "it's oh so quiet" – they do not respond to your voicemails or emails.
You think you are there. A little concerned maybe with the silence, maybe, but you assume they are mulling it over, so you crack on with other proposals and time passes, but then you get that email that throws a potential spanner in the works.
That email typically says something along the lines of:
“We need to discuss your pricing - this is too eye-watering.”
This is a common problem: discounting requests from a part of the business that probably doesn't appreciate how important a well-run but likely challenging Office 365 tenant-to-tenant migration is for the business, or the costs associated in such a migration.
Sometimes I’ve found myself giving away unpaid consulting in pre-sales and ended up doing all the work for another partner, or maybe for a migration vendor who supplies their own competing professional services. The potential partner then tries to get discounting through leveraging another potential supplier (“If you don’t offer this discount, I will have to go with X because this is just too expensive for me).
These days, to avoid this issue, I prefer to establish my potential competition up front. "If we scope this, will we get the business? Or am I competing with another bidder?" I ask in a nice, nurturing way so as not to put anyone on the defensive, of course!
It takes courage - but you only have to brave enough for a matter of seconds to ask the question. Then you just keep quiet, waiting for a response.
From personal experience, some customers can treat systems integrator partners (especially niche migration partners) with a level of disrespect, believing that they’ll only do this project once. Or they have underestimated the project budget and will ask the partner to discount with the promise of “If you discount it for us this once, we’ll make sure we keep bringing you back!” But if you give them one discount, they’ll keep asking for more and more.
Discounting needs to be avoided upfront, firstly, by building draw-down professional services time into your SOW from the get-go. This is not to build unnecessary fat into the proposal to be removed later, it is done because most projects, despite all parties working honestly toward an ideal workflow, will have unexpected delays and challenges. Understanding that, and building time into the schedule, reduces confusion and frustration later.
Secondly, and this is another part that takes courage: when discussing budget with the prospective client you should get a number in round figures from them BEFORE sending the SOW in. This gives you an idea of your budget and prepares you for discussions if you are significantly over their proposal (if you’re significantly under, you’re under-charging!). If your SOW is within this ballpark, then you must stick to your price, as they are already prepared to pay it.
However, if you submitted your SOW first without asking if they have the budget and if they are willing to spend it, then you are on your own as you left yourself open for the CFO or procurement to come back and ask for the discount, or for them to simply choose another provider.