Value versus Price

A true partner will help you discover the total value in your decision.

Ahhh…all those security “partners” and self-professed “trusted advisors” out there. Who are they, really? What are they all about these days? Is price the only thing that matters?

If you are like me, you have probably associated these as the Value Added Resellers (VARs) that permeate the market. Why? Well because they told us they were (parters and trusted advisors), of course!

But there’s something that always bugs me about just how they nearly all behave. And it comes out right at the moment it’s time to actually buy something from them. It’s that they are only out to sell you exclusively what they have decided to sell – at the price they have decided to sell it. That is why the security partners are absolutely awash with IT products and services galore. Because if you don’t buy one, you’ll likely buy something else. To the big VARs (a terrible term for oh-so-many), it’s simply a numbers game. And you, blissfully unaware perhaps, are lovingly referred to as something along the lines of a pipeline opportunity. How utterly endearing.

Let’s consider that a true partner or trusted advisor really goes after two things:

  1. Ensuring that your condition has dramatically improved.
  2. Seeking fair and equitable compensation for the products and/or services rendered.

Notice how neither of those, if taken seriously, would allow for selling their partnered product of hardware appliance X, software tool Y, or cloud service Z, without placing your needs absolutely first. That’s the mission and inherent value of the partner you truly want.

Here’s what is should look like:

The truest partner is one who has the mindset that they are going to put your needs up front, where they should be. What they sell will be limited to what they are absolutely passionate about. And only what they are absolutely passionate about. In cases where a fit is not of clear benefit, they simply walk away. Or, better yet, make a super warm introduction to another external partner who is perfectly right for the given situation. In this way you get the most specialized and professional experience possible.

If you think it’s expensive to hire a professional to do the job, wait until you hire an amateur.— Red Adair

But at what price?

At what price, indeed? That’s the million dollar question, right?

Let’s face it, IT is a very well known and understood commodity at this point. This means that the name of the game to businesses, especially procurement teams, is to get that commodity at the lowest price point possible. That’s just good value.

Lessons Learned

Through new two years of pricing, both as a vendor as well as a customer, I’ve learned to big lessons:

  1. You really want the vendor to make money.
  2. The best partners are the ones who can show you the value and can comfortably walk away when it’s in the mutual best interest to do so.

In case that doesn’t make complete sense, I’ll give you two scenarios to think about:

  • A customer and a consulting firm agree that it makes senses for a certain project to go forward. The consulting firm not only sells commensurate professional services with the desired outcomes, but also offers the tools (software, hardware, cloud services…) to help accelerate things. Great! But, it’s also understood that others offer the same commodity line items for the tools. So now the corporate procurement department has some input. Also great! That’s part of the value that they, too, bring to the table. In the end the procurement team determines that the price as presented is appropriate. And by appropriate, it’s understood that everyone comes out a winning. After all, that’s how partners (through shared success) treat each other. And they know that this keeps the relationship on solid ground, from which additional desired outcomes flourish.
  • A great consulting firm has many ways to show you value. He/she will simply not let the sale of some tool get in the way of that genuine partnership. So even if there is someone who is intent on playing an “us vs. them” game, this real partner will simply take that piece off the table. Effectively, it will be stated that here’s the price I can go down to on, given my own discount structure and level of partnership with my partner(s). I know you will find it quite in line with the pricing that others are able to extend, but if you wish to shop it, please do so. (Note that this is not a tactic at this point. The partner is not insecure and/or relying on this portion of the project to stay engaged.). Just please be aware that quite often when it comes to security, there is a cost to doing nothing. So if you take 30-60 days to go shopping, involving who knows how many additional man hours, any value from that exercise might very well be lost. In most cases, it will be immediately clear that the price was/is, near enough to where both parties will be happy.

The True Bottom Line

Your true partners / trusted advisors are pure gold. You want to take care of them as much as they take care of you. These are the ones who will be with you forever if need be. And they are even perhaps more loyal than many of your own employees. It’s clear that they are emotionally attached to your company and make it their mission to ensure that you, personally, succeed right there along with the business. For this, they will only ever seek fair and equitable compensation for the services provided. And the very best will do so by showing you the value, not silly and generally amateurish hourly billing. Finally, you will know how you rank as a partner as well, since they are in high demand and will stay with you simply because you were equally loyal to them.

The fake partners are those who are merely transactional in nature. They are pretty easy to spot as they are not the people who you really want, but rather the sales folks for them. And that’s if you’re lucky. All too often they are selling what they don’t really have – true experts in the areas of need. With just a little effort and clear vision, it’s easy enough to see the disconnect. These, “VARs” are transactional and should be treated as such. These are the ones that procurement teams can and should go after for the deepest discounts. You will cut these off as soon as the transaction is completed. Because, chances are any person(s) that you liked there will likely be gone in a year or two, as they are generally positioning themselves to step up to a bigger manufacturer-level role.

My pricing and licensing experience:

Since you asked, here are the highlights:

For many years of my time working for a large Fortune 15 company at a time where I lead the security solutions portfolio, I created pricing proposals and strategies for a great many things. That was a bit earlier in my career, so I certainly had to go through elaborate pricing committee meetings. And let’s just say it was some hard-nosed validation and a constant learning experience. But at the end of the day, pretty much everything was approved.

A few years later I went to work for one of the top 2 Silicon Valley network and security appliance vendors, I was responsible for pricing strategies of the leading SSL VPN product line as well as global pricing escalations on a worldwide basis. So basically whenever a customer would want to ‘beat up the vendor’ for a special discount, it came to me. Within 24 hours I had to respond with either an approval or a justifiable reason why not. Far more often than not, I would reject the offer. And we almost always won the business. Being able to show value is not remarkable…it’s a requirement and the language we all speak.

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