Every industry or market segment faces the ongoing battle of pricing their products and services at a competitive rate. In cloud, solution providers like yourself face this battle daily. These challenges come in the form of having to sell effectively to the end user, solve their business problems, and help the vendor make money too.
Not to be overlooked, the most difficult battle is providing value to the end user through strategic pricing. After all, customers won’t buy unless they know what’s in it for them. In today’s blog post, we’ll look at 5 considerations for solution providers when crafting a pricing strategy.
- Identify your customer: The first consideration solution providers must think about is the profile of their customer. No company can provide all things to all customers, so it’s important to understand your target market and their buying patterns, as well as what they can afford. The more specific your vertical, the more you’ll also be able to educate your customer about cloud in a specific context.
- Keep economics in mind: One of the most important facts of business are the economics of supply and demand. One way to stand out in the market is to provide a unique product or solution that few others offer. Another way is to develop a menu of pre-packaged solutions that can adapt to various client needs. In fact, leading research and analyst firm IDC validated the success of this option through recent interviews with solution providers. No matter what path you decide to take, your knowledge and offerings will place you in a unique spot to educate your customers.
- Know your competition: Market intelligence should be part of every business activity. While it’s not important to set your prices based on what you discover, having the knowledge allows you to demonstrate your value proposition to your customers in the clearest ways possible.
- Self-assess: A good solution provider knows that it’s important to be honest with themselves. Whether it’s assessing the progress of the cloud market or looking at the bottom line, IT professionals must take the time to reflect. These actions are necessary to make pricing adjustments or alter product offerings in order to stay competitive.
- Maximize margins and recurring revenue: Ultimately, running a successful cloud practice also means the ability to maximize margins, recurring revenue, and management of clients. While some vendors will provide better margins through their own partner programs, others require the solution provider to manage their clients manually. Partners who leverage the Ingram Micro Cloud Marketplace gain access to a global Cloud Marketplace, industry expertise, solutions and enablement programs that empower organizations to purchase, provision, and invoice cloud technologies with confidence and ease. This frees up time to pursue more clients and make more money.