VeraSage is pleased to announce a new Trailblazer in the technology industry — Forepoint LLC.
Based in the northwestern United States, Forepoint has undergone what President Kevin Cumley describes as a magical transformation. “This business is fun again after some years of difficulty. Our customers are happier and more profitable than ever and it is due to the move we have made to what we call value selling and value pricing.”
Not that it was easy. It was actually quite hard. “The hardest part was convincing ourselves. We had some struggles just getting buy-in from our people.” Take Sonia Gray, vice president and partner in the firm. At first, she resisted thinking that customers would not understand and believe that value pricing was akin to price gouging. “I was not convinced, but I agreed to at least try it,” she begins. “Then something happened that dramatically changed my thinking.
“I was talking to a prospect and told him that we wanted to fix price his engagement rather than bill him by the hour. He looked at me, dumbstruck and said, ‘I don’t know why everyone isn’t doing this. I’ve always thought that billing by the hour was just a license to steal!’ From that point on, I was convinced that this was the best thing for both our company and our customers.”
“Getting Sonia over the hump was the catalyst that really got things started,” says Cumley, “Not that it still didn’t require convincing others.” A recent example illustrates this challenge.
Forepoint was engaged by a customer to perform a simple (from their standpoint), but high-risk movement of data for a customer. Cumley set the fixed price based on the relative value to the client and risk to his firm (based on time it came out to a little over 4 times their standard hourly rate). Once the Forepoint staff was informed of the price quote, one of the consultants on the project even emailed Kevin to express his concern, “I know that our services have a lot of value, but I think that this data move has been grossly over-priced, and could be a problem.” Cumley held his ground. “The answer is simple – this is not about time, but value. My question to you is this – given the very high risk for a project of this nature to both our firm and the client, what is the value to the customer,” he responded. After some additional email exchange, the consultant reluctantly capitulated, “OK – I give.”
Kevin even admitted that he expected some price resistance from the customer. The result, the customer not only signed off on the proposal without any resistance, but also was thrilled with the results. “Probably left money on the table,” laughed Kevin. “It ain’t always easy, but it sure is fun!”