The answers, according to my recent experience in a story on software pricing, are B) and C). A number of consultants who negotiate software contracts told me that major software vendors are sneaking price hikes by customers with ever more complex contracts, terms and conditions.
None of the four household-name software vendors to whom I sent detailed, specific questions about their pricing policies gave a convincing response.
Two never replied. A third declined comment. The fourth answered with bland marketing-speak and a link to a company blog post announcing a new, supposedly simplified licensing program. But the blog post, like the emailed responses, was mostly marketing jargon.
Even worse, the only comment on the post was a customer complaining that the vendors licensing agreements were hard to understand. In other words, the blog post the PR person referred me to hurt their client’s case.
If you’re actually trying to bamboozle major customers and can’t admit it, fair enough and good luck. But I suspect there are other, more convincing answers vendors could give. For example:
- “Yes, our licenses are becoming more complex, but that’s because our customers’ environments are becoming more complex. We’re trying to reach a balance between a fair return on our development and support costs and not gouging our customers. Let us explain the clauses you asked about…”
- “We recently changed our virtualization licenses because, with our software running on more physical platforms than we ever expected, our support costs were going through the roof. Virtualization is also putting more demands on our development staff to support features like dynamic migration. We need a price hike to meet these costs and maintain our margins.”
- “Yes, we are claiming the right to charge users of third-party apps who access our ERP application. And, yes, when we ask for those charges seems a little arbitrary right now. But we’re working with customers to figure out when it’s appropriate. Here are the questions we’re grappling with…”
Now, let’s look at the downside of refusing to respond or giving canned answers:
- The reader hears only the charges against you, not your explanation.
- You lose the opportunity to explain your position and make sure the reporter understands it.
- You lead the reporter, and reader, to assume you have something to hide.
- You leave more space in the story to talk about the accusations, not your responses.
I can hear you nodding now and saying “I agree, but I can’t get my boss/clients to listen!” If this is true, what would it take to convince your boss or client to fight back when things get ugly?”
Filed under: PR/Marketing Trends
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