Every business needs a nemesis.
For example, do you know how much harder you need to work to make something mediocre look good? Now imagine taking something that’s good to great. Now imagine yourself as a perfectionist, where you are constantly motivated to squash that next little imperfection that you see out there.
Have you ever painted a room? You know how once you peel the tape there are drips, missed spots, paint under the masking tape, etc? You’re aware of all the imperfections. Nobody else looking at the same thing would see them – but you know they are there and it’s driving you crazy.
Business is not so much different than that.
Every day we work on building a better solution and making sure that it has the most meaningful impact it possibly can have in the lives of our clients. On surface, what we do at Own Web Now is not that special or that unique – we play with computers. But a few of us also know that our solutions play a small part in curing cancer, in not making Blackberry go off every few seconds during surgery, in fund raising, in financial markets and in things that are very much life and death.
So we invest everything we are into building that.
We also invest in you – even if you’re not one of our clients – we’ve likely spent some of our money on your lunch, dinner, air conditioned room, training webinar and so on. Yes, the cost of sponsoring MSPU, CharTec, ASCII, CompTIA, SMB Nation, XChange, Microsoft WPC, Microsoft Teched, msmvps.com, SBS Migration, Autotask, ConnectWise, smbbooks.com and tons of other things is immense.
We don’t do it just because it’s great marketing or just for the sales leads – we also do it because it’s the right thing to do that advances all of us as an industry.
That puts us on the edge of the marketplace where we can design the solutions that are ahead of the game of the companies much faster and richer than we are.
It arguably puts Own Web Now and ExchangeDefender in the leadership spot. We’re not the cheapest thing out there.
Own Web Now and ExchangeDefender are my self-painted walls. I see all the imperfections in them daily and wake up to fix it.
Yet… I often hear “We love you [random praise], but business is business and can you beat _____”
Business is Business
When people say Business is Business what they really are saying is all that other stuff you do really doesn’t matter, only my profit on this deal matters.
I’ve heard that a lot. I’m sure you have too.
Unfortunately, when all that matters is the price, the playing field is not equal.
There is a reason why a dinner at a fine Mexican restaurant is more expensive than Taco Bell. Yes, it might still be a taco that you’re eating, but the two are beyond comparison.
Same goes for IT services.
But let’s just look at the taco. If you can’t tell the grade of meat used in the taco, if the sauce used completely masks the relative freshness and it quenches your hunger, why should you be forced to pay $12 for a taco plate when you can buy one for $0.89 and have it served in your car?
You might even argue that eating in your car is more convenient. It’s certainly nicer to be in control of having the ability to refill your soda with the precise mix of ice and soda you like as opposed to waiting on a waiter to do it for you.
It’s all relative.
Which is why you need a nemesis.
The fine dining version of Mexican food would have a hard time justifying the cost of their entrée if they had to compare their taco to a taco sold at Taco Bell to someone who didn’t have the common sense to tell the difference between the two: “Yeah, so you have a fountain – they have a bigger menu!”
Without being able to take the differentiation conversation away from the price, the nemesis argument doesn’t exist.
The nemesis argument is also far worse when you don’t control your nemesis. It’s natural to want to have people believe that you’re offering much more than someone else.
But what if the nemesis was just an option?
What if you had a choice?
That’s fantastic, you are only concerned about the price. Here are the two prices. In one corner, we have this awesome all you can eat full buffet and on this other side we have a bargain hunter menu item. Which one would you rather have?
Naturally, they want everything for the price of the bargain hunter special. But world is unfair and you have to make a decision.
Do you want to pay a premium for a premium solution, or are you only concerned about controlling your costs?
You see, the argument becomes a little bit easier to break down once we take the price out of the conversation. Because with the price, there is only one logical conclusion: the lowest bidder wins.
The way you justify the value of your solution is by explaining how all it’s components are greater in sum than the pieces that put it together. Your job is to present your solution in a way that the client would seemingly make a mistake not to pick you.
Nearly a decade ago Dell started selling $349 servers.
These beasts were powered by Celeron processors, barely had a gig of RAM and came with a tiny single hard drive. If you tried to adjust the configuration even slightly, the price would explode.
End result: tons of people bought really high end stuff. Yes, some bought the barebones special and lived to regret it, some were even happy with it.
Without the choice, fewer people would understand the value of the higher priced solution and would not even entertain the chance of listening about it.
There are many people on both sides of the spectrum: those that only have the budget for the entry level system and those that really need something more adequate to suit their needs.
Without being able to differentiate the two, you (the seller) lose.
This in no small part was the reason we built a solution that you will be hearing about a lot. It’s a direct competitor to what OWN does, running on top of OWN’s IP.
How does it make sense?
I make money on both sides of the pole.
If they are only willing to pay for the bargain basement special, I can make a tiny margin and still have an opportunity to introduce them to my partners. If they are however interested in the premium solutions, then they can appreciate the difference in price and be more willing not just to pay it but to appreciate how much of it goes to delivering the service.
In a world where IT services are rapidly being depreciated and phased out of the marketplace, you can’t just look at the cheaper competition and dismiss it as inappropriate because nobody cares what you think – people that vote with their wallet are the only ones with an opinion that holds any value. If they want to compromise, let them. But those that understand will allow you to preserve your margins.
In business as a business, decision makers are asked to manage tradeoffs and take risks. Cheaper solution might make the sound budget decision but create a management risk of picking something that loses 150,000 accounts in a day with no Gmail phone number to call. Is the customer comfortable managing that risk? Do they even have any flexibility to check out other solutions? Is the solution just a feature point or is the solution the implementation of that feature?
Dear Vladville readers, this is the Trusted IT Advisor obituary: The age of IT arrogance is over. To be in the IT world going forward you don’t get to dictate to the clients what they need to pick, how much they need to charge – because it’s easy to find another provider. You have to embrace your nemesis, you have to elevate your value and make your clients think hard and long about whether the compromises they are about to make are truly best for their business.
Allow me to introduce you to my new kid, my nemesis: www.cloudblock.com
P.S. Value is arbitrary and relative to the observation of someone that likely can’t understand the whole scope of it anyhow. But if you can’t make money on both sides of the spectrum, and separate your premium solution from your entry level one, then for your sake I hope you’re truly exceptional. To the rest of us realistic folks out there, game on.