They key with many of these manipulative sales techniques is that they are on rare purchases for which the buyer has little knowledge. Most people don't buy homes, cars, mattresses, with any regularity so whatever badwill you generate will be irrelevant 10-20 years down the line and likely born by a different seller.
Like healthcare, it's hard to treat individual private buyers as an efficient market. Housing has become more like NFTs and memestonks (It can only go up!)... which is true until it isn't and everything goes down. Supporting prices through leverage and regulatory control is now so ingrained that it's hard to do price discovery. (edit: strangely, like memecoins you can actually overbuild a lot of housing like in China and keep prices going up for up to a decade out of sheer buyer momentum)
> Most people don't buy homes, cars, mattresses, with any regularity so whatever badwill you generate will be irrelevant 10-20 years down the line and likely born by a different seller.
One scummy trick in that area is owning multiple brands. My understanding is the appliance market is very consolidated (basically 2 main players own almost all the brands). They've carefully maintained the separate identities of the brands they acquired, even as they consolidated design/production, so any "badwell" they create will have a good chance of just causing the customer to switch to another one of their products.
There probably should be some kind of "reverse-trademark" law that requires companies to maintain only one brand in a product area. Trademark is about allowing them to protect their reputation from bad actors, and my "reverse-trademark" would protect consumers from using multiple trademarks to avoid the consequences of a bad reputation.
>Most sales, especially within IT, is about trust.
Our CIO ordered us to switch away from VMware when Broadcom made changes to the licenses. We are a mid-sized company with 1500+ employees. If I remember correctly, Broadcom anticipated some customers would switch away, but they could still profit more from their larger customers.
My friend works at a bank. They switched from Azure to Google Cloud because Microsoft's prices "didn't make sense" to them.
Where I work currently they won’t move off AWS because the relationship is really good and the support has been good (so I’ve been told) and they have had the relationship for quite some time so even though we could get better pricing with GCP or switching some things to more specialized yet reliable vendors we default to AWS for almost everything because the relationship is seen as solid and trustworthy with history to back it up
Doesn’t mean we don’t get quotes from other providers in negotiations at contract renewal time and use frameworks / technologies that allow us to switch vendors pretty easily if we needed and I know there is an upper limit here. However it’s also one of those “we pay a little more for peace of mind and familiarity” things, so it’s with some (relatively marginal) higher cost
Most IT are cost centres and there is pressure from CFO/CEO to shift to a more cost-effective option when there are cost lines that are 7-8 digits long. Companies also regularly do the math on when the added pain of doing the lift and shift is actually worthwhile, compared to paying whatever bloated rate they're being charged at that moment.
Whenever I negotiate prices with SaaS companies they give you a price and then they say this offer is valid x weeks – and "after that we cant guarantee the price". And I always reply the same thing, "I'm in no hurry – let's see what the price is next time. If it differs greatly then I can not trust you, and it's better to find out now than in two years when we are locked in to your product."
There isn't necessarily any malice intended; nobody is going to give you a price and honour it forever. Any quotes I do in my micro-ISV are valid for 1 month - not because I'm likely to change the price, but simply because I have no control over things like currency exchange rates and energy prices.
But, I certainly don't use it to pressure the customer.
This is probably a bad assumption. A change in the offer price does not reflect on their trustworthiness. You’re also tricking yourself because someone wanting to lock you in down the road and raise the price won’t do it up front, they’ll do it later.
An offer price can change due to market conditions. The statement that price can’t be guaranteed is an optimistic speculation that sales or costs might jump, so you can buy now before their business increases and prices rise due to higher costs or demand. You can legitimately benefit if you buy before prices go up. You certainly can gamble that prices won’t go up, but if they do and you waited, it doesn’t mean the other party can’t be trusted, it means you lost the bet.
If you wait and get a higher price, that could even be a sign that the company is more trustworthy than if the offer doesn’t change. But of course there’s no guarantee. And ultimately there is no guarantee that when you buy a service on a limited time contract that you won’t have prices jump later when you’re ‘locked in’. It would be quite silly to not expect the renewal price later to rise for a variety of reasons, and you should have contingencies in place and be willing, able, and ready to switch providers.
I think the context here is when you signed up for a trial and you have a sales person emailing you every single day, and by the end of the week they start using the "I can only guarantee this price" bullshit. It's just an aggressive sales person trying to pressure you.
I don't know what companies you are working in, but if the service is deemed valuable enough really nobody cares about money as long as it's in the ballpark of what similar services costs. And When it comes to time, yes all projects starts with "we gonna start using this this week" but we also know it takes a year to roll out even the most basic tool in a medium sized organization so a couple of weeks here and there doesn't really make a difference either.
All that matters is if the tool seems to solve your problems – and the price is not significantly different from the competitors and having a sales person bugging you every single day telling you you need to make the decision now because otherwise who knows what might happen to the price – honestly they can just go ** themselves. I make the decision when I'm ready, and if they are deciding to significantly jack up the price in between that period they are just making themself less trustworthy.
That’s all fair. Sales people are pretty well known for skeezy tactics, some of the same stuff author was referring to with ‘ads eww’, they have an earned reputation that the nice sales people have to overcome. I guess one upside to this is untrustworthy sales people don't necessarily reflect on the trustworthiness of the business they work for. The only way to really know if you’ll get jacked once locked in is to buy and see what happens, or have a longer term contract.
To your point perhaps, one thing large organizations value above most things is predictable cost. They actually don’t want usage based pricing because it’s unpredictable and could spike, even if the usage based cost is significantly lower on average.
I tried marketing usage based pricing to companies for too long before realizing that it was a disincentive working against me and that price didn’t matter much.
For mature SaaS companies, this could be a function of quarter/year-end, and trying to hit targets. For smaller companies (I run one), this is more likely because they would value your business now because it helps them validate their product and get future customers. If you become a customer after they already have customers larger/more well-known than you, that value-add is nullified.
A really good point. And, you have to think about budget levels. If you have a product and it is 50k, and you pursue a FOMO strategy, remember that you need to convince dozens of people inside the organization that they will miss out. The half life for a FOMO conversation isn't great, one advocate inside the organization might be captivated but when they send the email to the next person, they won't feel it and will sabotage the deal.
If you are selling something under $10k, then you can often get one person with budget approval up to $10k to buy it on a whim, and that's much easier. But that actual level is hard to figure out.
All that being said, your point feels like it could be restated to say they care a lot more about protecting their jobs. And, it is really strong right now.
Is saying "our prices will increase in July; anyone who pays for a full year before then will be grandfathered onto the lower cost plan until 2027" a breach of trust? To me it feels like it makes me trust the company more.
Hmm, I worked for a large e-commerce company and they basically faked the red hot "Only 5 items left!" warnings to drive sales with technical mumbo jumbo in the small print.
Did not seem to negatively impact their sales after all... probably same mechanics on Booking.com etc. with hotel rooms.
Sure. And a furniture store near me while I was growing up had a "going out of business" sale for over 15 years. There are plenty of people who aren't paying attention to these sorts of things, and there are plenty of sketchy businesses that take advantage of that.
I have a sort of life rule about being sold to -- if anyone is saying/implying that I need to make a purchasing decision quickly, my decision will always be to not make the purchase. There's no such thing as "act now or you lose" in the wider marketplace.
Scaring a customer into buying with “fear of missing out” and you risk push them even longer away.