Case Study from Aries Technology Group

Aries Technology Group sent in this case study on Pricing with Purpose. It is published for those of you who are always saying "Ok, I like the idea, but how do you do it in the real world."

One of our long standing customers was leaving us. Purchased by a competitor, their ERP system we had supported for years was being retired and the current solution of the purchasing company was being implemented. We had a great relationship and told them, out of courtesy more than anything else, if we could be of any assistance to call us.

And in fact, they did, much to our surprise.

They wanted to convert current and historical data from the retiring solution to the new solution. They had struggled to find and extract the data in a format that could be imported into the current system. They asked to utilize our knowledge and expertise to create six files in a format that could be imported into their current system.

We had never had a customer ask us for help in this manner before. How to price this project: the creation of six reports out of the retiring ERP solution? Especially if the customer would cease to be a customer once the project is completed. Plus, we had other projects in the works with customers that we hoped to maintain building successful relationships.

We talked it over inside our office. We needed to make sure that if we took our attention away from on-going customers and focused it on a customer who was leaving that we were compensated properly. We offered the price of $32,000 to create the reports, to begin the project in 10 business days and to complete the project in less than one week. This value, we explained to our customer, reflected our understanding of not only their value but to ourselves as well. It had to be worth our while to put existing projects on hold to accomplish the project for an exiting customer.

Their response was very enlightening: "How much to schedule it sooner?"

Clearly the customer completely understood the value in the proposal. We offered a new price, $64,000, to begin the project in three business days and complete the project in less than one week. The customer now had three choices: no engagement, a middle price and longer start time or a higher price and shorter start time. They told us to expect a response the next day.

Their decision criteria were balancing the money with the scheduled completion time. They chose our first proposal (the middle option for those keeping score), and we completed the project to their complete satisfaction.