Should Integrators Be Offering Multiple Options / Quotes?
Integrators hate price shopping.
On the other hand, integrators typically give a single quote for a single selection of products. Is this a mistake?
A recent experiment showed that offering two choices instead of one radically increased the probability of a sale. Here's the journal article and below is a video that explains the lessons inside:
Of course, this experiment was based on a single product and not a system.
However, the general principle seems applicable - without any choice, most buyers hesitate and look elsewhere for more options. By giving them a few options, it lets them feel more comfortable that they are getting a good deal.
Practical Surveillance Example
Instead of submitting 1 quote for Axis / Genetec (call it the 'premium' one), offer a budget one (analog kit) and a mid tier (e.g. - Arecont / Exacq).
It's certainly a little more work but now they customer can pick and choose the right one for them, feeling more confident that he is making a full and informed decision.
Btw, price anchoring is a related tactic, by giving one really high cost option, you make the buyer more comfortable about the price / value of the lower cost ones.
Ok, what do you think?
I have been doing this about 3 years now. It is my job to tell client what is out there and show I can handle training them on each system with my eyes closed.
On the video side I strongly believe in the power of megapixel camera, however I am a realist and I realize some of my clients don't want to spend the extra money for an IP video system. Before I even quote the camera system, I study and observe the client and their workspace around them. In addition on how I need to protect their workplace enviorement with security equipment. (Putting that social and behavioral science degree to use!). If they have an old Windows XP PC laying around, a phone room with a dusty old cable router or they don't even have an iPhone yet, the odds favor them picking an analog system (though this isn't everytime) over an IP system. I am aware of their buying habbits for other equipment when I walk their facility as well so this give me a clue as well. Now when I see high end old analog equipment, this tells me they are used to spending money and are ready for an upgrade to a megapixel system.
When the client doesn't care about video quality of a megapixel camera or they are satstifed with the quality of the analog cameras I show them, this is a big buying sign hint. However they are warned about the limits of the analog cameras. So I don't want to hear how they can't see anything 40 feet away from the camera. I would estimate over the past few years my quotes have gone 70% analog to 30% IP.
Now if I am competing aganist the local one man band, I am more likely to distgilish myself by just quoting an IP system. I know I can't compete with him on price alone soI have to show myself as the quality vendor. I'm quoting pears and he quoting apples. If the end user is just worried about price, odds are they wouldn't have been a good client anyway.
However I don't do this on the access control or fire side of things. Once in a while for an alarm system (Bosch & Honeywell)
I often provide Two solutions. Today I did a proposal for a 128 camera system and provided options for two different VMS platforms. I agree that not everyone wants the top tier system and I want to make sure I provide whatever I can to meet their needs while balancing the fact that I have to be the one to ensure it functionA after the sale. it is more work but I believe it does win deals.
One of the sales reps at my last job did this a lot. Not all the time it seemed to depend on the customer. I like Steve Beck's reply, you can sometimes get an idea where the customer may be leaning just by seeing how else they've spent money in their building, or by simply talking to them.
I worked for an integrator that made a rule to offer a 'good, better, best' option series in every proposal.
- Indeed, potential customers liked seeing things stacked and it increased confidence that we weren't just offering a 'single-note song' answer to every problem. *cough*Avigilon*cough*
- It especially worked well when selling IP in replacement of an analog CCTV system:
- Good = repair, replace with same.
- Better = 'budget line' SD IP and VMS,
- Best = 'premium brand' HD IP, new servers, etc...
Even if they chose the 'good' option, they had a good proposal to budget for what they really wanted - an upgraded, top of the line surveillance system. They would come back to us for this.
- Many customers didn't want the only 'good' and automatically chose between 'better' or 'best' options. Also, it was very compelling to say to them "Most of your competitors/ counterparts/ folks in your business choose the 'better' option and are quite pleased with it." There was a natural aversion to buying they cheapest option if the carrot of the 'better' option was dangled in front of them.
- Every quote was really three quotes. This added to the 'cost of sales' and often slowed the process down.
- Sometimes it backfired, if the salesman could not articulate well the difference between the options. Sometime customers would be confused as to why you were offering anything more than the cheapest solution.
- This approach flat out does you no good in a competitive bid/RFP situation.
As a Sales Engineer working for a Integrator we tried to offer at least two proposals, mainly for IP video. It was pretty mixed if the customer took the higher priced option. Sometimes the higher priced optin was just higher megapixel, usually had a real server with RAID and redundant power supplies and sometimes it was a lower tier manufacturer vs higher tier manufacturer.
Depends on the customer, and how far they seem to trust me. If they want to do the research themselves, I'll write two or even three quotes, bracketing price (two, more usually). But I get a lot of customers unwilling or, more usually, unable to research themselves, and for them I'll just write the most reasonably priced quote I can and send it out.
In general, my philosophy is "the cheapest good one that'll accomplish what the customer wants to do and last a reasonable amount of time", but of course I'm not paid a commision, so YMMV.
But, yes, for customers who want to see all their options, I'll write a gold plated system and then one reasonably priced system, and sometimes a bare-bones system. When I write three quotes, I always make sure to be specific about the limitations of the cheap system, so the customer isn't suprised when they try to get the system to do something it isn't capable of.
Whos prodict does a better job for the end user and for how much savings. Axix vs Arecont is not a true match up. Also Exact will perform must of the functions but Genetec has a few feature set the will be hard to match. The question for the customer is biggest bang for the buck.
I always say that "Good, Better, Best" works great when you're buying a television, but not with security. In the end, either the system does what it needs to, or it may as well not be there. For a specific requirement, there's no point to having double the resolution you need, just like there's no point to having half the resolution you need.
That said, I do like offering customers at least two options, but they tend to be more "different approaches" rather than one being better than the other. For instance, I'm working on a project for a warehouse that needs to see down long isles. I'm proposing that we can either use Axis cameras pointing down either end or a Mobotix camera in the middle looking both ways. Both have their pros and cons, but they're both a good fit for what they're trying to do (Mostly comes down to labor costs vs. camera costs).
Customer still likes that they get to make that choice, though.
Convincing arguments on when, how, and why to use multiple quotes.
All good comments and validation for proposing multiple options...but ran across this situation that I thought would be good to add to this discussion.
Recently attended a pre-bid for a large complex access control project where 12 manufacturers are listed as "approved" solutions. A question was asked if Integrators could propose more than one solution. The end-user stated there was nothing preventing them from doing so, but they would get scored lower because the end-user wants the Integrator to propose the solution they believe best meets their requirements from the information in the RFP. Additionally, the end-user mentioned in a side discussion that they approved this many systems knowing that some will not meet their requirements. The reason: to eliminate Integrators that were either choosing older technology and/or didn't fully understand their requirements.
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