A Question on Pricing and Resource Planning

Some weeks ago I received the following email from Wayne Schulz:

A random thought on pricing that may be worth a mention because as projects grow in scope and typical staffing numbers shrink – load balancing of work is critical and I’m seeing clients get a quote for work in early summer, then the client delays it, then they want to pick it up in year end.

We already tell people to add 50% to the project if any part demands night / weekend work. I don’t see why we should not have a similar surcharge for work that gets delayed into our busy season.

Just a quick thought that came to my mind as I struggle (as I’m sure most of you are) with prospects/clients who you proposed on back in March/April and maybe started some work in June – only to have the client back off because of any number of concerns (not ready, need further data fix-up, etc).

I have four prospects/clients whom I proposed on back in March/April and maybe started some work in June, only to have the customer back off because of any number of concerns (not ready, need further data fix-up, etc). They suddenly want to become active in what I feel is my prime season — November through January 31.

Which leads me to my question – why the heck do I allow customers to be quoted on one price for work scheduled for our down time – and then the customer delays and comes back to us in peak season.

Anyone try booking a cruise in the months of March or May. They’re dirt cheap. Why? It’s off peak. Try booking again when school lets out. Completely different fare structure. Why? It’s peak season.

Yet, I pretty regularly see this happening with my projects. I have one customer where I scheduled an upgrade for June 2010. They discovered out of balance items and rather than purge data they opted to create an adjusting entry (most of which I provided while I was there in June).

Fast forward to January 1 and suddenly they want to be live by January 15.

Ummm – ok so I’m not that fast on the uptake but it hit me this morning. These clients are being quoted during off-season and then moving their engagements into the peak season for no change in fare!

Just an observation – and I don’t have a good solution other than to work into my options that pricing is only valid for engagement started by X and finished by Y.

My reply:

Wayne,

AMEN!!!

The price quoted should have a specific completion date associated with it. If the customer wants to change the completion date it is a change request which may or may not include a price change. In the cases you are describing they certainly would.

Some sample language might be:

  • “I am sorry, but the original quote was for work done during off-peak operations for us. Now that we in our peak season, there is a fee increase. You, of course, have the option to delay this until next summer for the original price.”
  • “I am sorry, but you lost your window. Our company is similar to an airport, we can only land so many planes at once.”
  • “I understand you had to delay, it happens to many of our customer, but…”

I hope this helps.

What might you add?

Links to Summit 2011 Social Media Sites

imageBeing friends with one of the event planners is a very good thing.

We are planning a blitz on these beginning in February, but this gives you a jump start.

Here is a list of all the social media sites for Sage Summit 2011.

Promote away!

Facebook: http://www.facebook.com/SageSummit

Twitter: http://twitter.com/Sage_Summit

LinkedIn: http://events.linkedin.com/Sage-Summit-2011/pub/506615

Flickr: http://www.flickr.com/photos/sage_summit/

YouTube: http://www.youtube.com/user/SageSummitEvent

Cool New Tool – tungle.me

imageMy thanks to Sage partner Wayne Schulz at Schulz Consulting for turning me on to tungle.me. This free (there is a paid premium edition as well) web service allows you to publish your calendar to the tungle.me site where your customers can see what your available time is and propose scheduled meetings.

In addition, you can add a widget to your web sites, see mine at the top right of this page.

Effective immediately, if you would like to have a conversation with me, please click on the widget and enter the information as instructed. You must propose at least two possible times to connect.

A Different, but Authentic, Job Ad

Earlier this week, I had the opportunity to work with a Sage partner, Bill Delgado of Keystone Software Solutions, on creating a job placement ad for a position he has been trying to fill for several months.

It is a long story, but the gist of it is that it is really hard to find someone with a very specific skill set in the software implementation industry unless you either: a) hire someone from a competitor, or b) someone from another geographic area decides to move to your location, you have to be willing to groom your own new talent.

After a few failed attempts, however, to find the specific talent, Bill has decided to begin the search anew.

I suggested that they might want to rethink the ad they had been placing. I dug up an article I remember reading from Peter Block on how Ernest Shackleton advertised for people to join him on his failed excursion to the South Pole.

In the article Block suggests the following ad:

Join our organization and become part of a place where:

  • You are expected to care primarily for the well-being of the institution and the larger society. We have no mentoring program, modest benefits and no organized way of planning your career.
  • Our purpose is to do something important and worthwhile, even if we don’t make the pages of Wired, Fast Company and Red Herring. Life is not a fashion show and we are not role models. Quick growth is overrated. Besides, who would want to go through life wired, in fast company and in pursuit of red herrings?
  • The realistic chances of getting rich quickly are actually quite slim. Only a few players in our industry will really prosper, so come to work for a place where the experience of each day is a reward in itself, and let tomorrow take care of itself.
  • Safe return doubtful. Our company is a risky place to be. The work is hard, the relationships are volatile and the management keeps changing its mind. Signs of imminent improvement are hard to find.

Here is the ad Bill is running this week.

Join Keystone Software Solutions and become part of a place where:

  • Our purpose is to help business thrive through a synergy of people, processes and technology.
  • You are expected to care primarily for the well-being of the organization and its customers. We have no mentoring program, modest benefits and no organized way of planning your career.
  • The realistic chances of getting rich quickly are actually quite slim. Only a few players in our industry will really prosper, so come to work for a place where the experience of each day is a reward in itself, and let tomorrow take care of itself.
  • Safe return doubtful. Our company is a risky place to be. The work is hard, the relationships are volatile and the management keeps changing its mind. Signs of imminent improvement are hard to find.

If interested, Keystone Software Solutions is seeking candidates to provide implementation and support services for financial and business management software.  Prior experience implementing Sage MAS 90 business management software or accounting background is a plus.

I am curious as to what the response will be. What are your thoughts on this type of ad?

Update: Link to the actual ad on craigslist.org.

Memories of Customer Conferences Past

Note to readers: This post is focused on Sage Partners. If you are not a Sage Partner, you might want to sit this one out.

Having been with Sage over seven and a half years now, I am hesitant to begin a story with the phrase, "When I was a partner…" So much has changed in the almost ten years since I practiced that hearing myself say this makes me cringe. But against my better judgment, here goes.

Among my fondest memories of when I was a partner, was participating in the Great Plains customer conference which is still known as Convergence, albeit a Microsoft event now.

In the first year of its existence, my firm was fortunate enough to have a few customers who were interested in making the trek from New York to the Swalphin (my wife’s pet name for Disney’s Swan and Dolphin Convention Center in Orlando). In fact, one of our customers won the first ever software industry award for customer loyalty.

The most dominant memory though is the fact that all of us partners felt as if we were cohosts of the event. As examples:

  • We gave each of our customers tee-shirts with our logo and the old Great Plains logo on it and asked that they wear it on a certain day of the conference.
  • We made sure to eat breakfast as a group and invited our friends from the GP support department.
  • We arranged for special walkthroughs of the trade show area with our customers in attendance.
  • We were encouraged to organize dinners and invite GP executives who graciously came and spoke to each customer.
  • We met our customers and GP friends every night at the dueling piano bar, Jellyrolls at the Disney Boardwalk.

All this was fun to be sure, but there is one important business result, we never lost a customer who attended the event with us.

As someone who is working on the first combined (partners and customers) Sage Summit 2011 team, I can tell you we want our partners to feel like they are cohosts of this new event. I am sure many Sage partners have heard about some of the things we have planned, but I would like your feedback as well on how we could make you feel as if you are cohosting the event.

A Call for Ideas

I have been asked to deliver a four hour session for Sage Partners at Summit 2011 on some advanced consulting topics. I have a few ideas as to topics including: change and transition and dealing with sabotage, but I am wondering if any of you have some thoughts as to topics. Again, the session is on advanced consulting.

Ideas?