Managers of companies selling software services in Central and Eastern Europe have witnessed a big shift in the market in the past 5 years.
The shift from selling “cheap” and “cheaper” to … something else.
What is value
There are 2 sides to any commercial transaction: value and price.
Price is relatively straightforward. It’s a number. It’s tangible, it’s visible, people can understand it, compare it, negotiate on it.
But price without value doesn’t mean much. Because price is relative.
Value is subjective.
One would hope that value is objective, based on some fundamental laws of physics, so that it’s deterministic and non-negotiable.
But value is formed in the human mind just as much as it’s a result of teams working together to create working software or of engineers installing servers in data centers.
The market shift
There are moments in time when cheap and cheaper don’t work any more.
When salaries increase with double digits yearly, when companies operate in advanced economies (as opposed to still developing economies), when capital, people and goods flow freely across borders of countries, cheap is not a viable commercial strategy anymore.
When cheap doesn’t work anymore, the next obvious approach is “selling the right level of quality at the right price”.
Sometimes this means increasing quality and prices for those clients that need and ask for better.
And sometimes it means offering a lower level of services for a lower price to those customers that cannot afford more.
WHAT THIS MEANS FOR YOU
You have to decide if you are working in a market that is looking for “cheaper” or not.
Depending on the answer, the way you manage your pricing and sales process should be radically different.