Monday, March 2, 2009

Charging for each individual service or "bundling" services; what to do?

Well, I did mention in my initial post that I'm highly opinionated. So, here we go with one of my opinions.

This one has to do with considering the big picture when approaching the issue of how to charge (or what to charge or if to charge) for the services you provide to customers (or promote to prospects). In particular, I read on someone's blog that you should never give anything away for free. That, if you do that, that sends a message to customers (and to prospects) that you don't place any value on those services. And, that, if you don't, why should they?

Well, to me, that those statements are "generalities" and, to me, generalities often overlook "specifics." Ever since I was a much younger guy in the reprographics business, I've felt that in order to be successful in sales, one must have a "sales strategy" and that "sales strategy" should be approached very specifically, i.e., on an "account by account" basis. In other words, while you do have to have an "overall" sales strategy for your company, each individual account (whether customer or prospect) requires and deserves individual attention, more specifically, what I refer to as an "account strategy." While many customers (and prospects) are alike, no two are really ever exactly the same. Some have different "hot buttons" than others ("hot buttons," meaning, what's important to them; what issues are likely to influence them to do business with you.) The other factor to consider, "account-strategy-wise", is the overall value an account offers, i.e., if you had 100% "account share", what would that mean to your company's sales, and, of course, related to that, to your company's market share.

Take, for example, e-plan room services and digital services. How do you charge, what do you charge, do you charge, should you charge? If you listen to some supposedly knowledgeable sales management and top management people in the reprographics industry, you must always charge, without exception for every service you provide. And, if you listen to me (and, I'm positive there are others in the reprographics industry who share this opinion), whether you charge for each individual service or offer some services for free (i.e., bundled into other services) should depend, almost totally, on your strategy for each individual account.

Also, I don't want to forget to say this ..... when you find a competitor who says "you must charge for each individual service, don't give away anything" ...... he/she is, in my opinion (and, based on what I've learned and observed) either a) putting up a smokescreen (meaning, getting you to think his/her company is charging for every individual service, even though they may not be doing that), or b) plain stupid.

This, of course, has to do with what some call your "value proposition." Why should a customer continue using your company, why should a prospect consider converting its business to your company? Decide what your value proposition is, but never ignore the fact (I say fact, meaning it is fact to me) that developing and employing sales strategy on an "account by account" basis requires that one consider the most effective way of delivering that value proposition. There are situations (this, folks, based on my experience in the real world) when "bundling" services is an appropriate account strategy.

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