Solution Ram Rod

Today I want to share with you something that happened recently, that quite frankly has left me angered. It is a practice that my team coined the “Solution Ram Rod”. It is the practice many underhanded technology companies use when they want to sell their client on a specific solution, regardless of the viability for their needs.

To give you some background, last week I was contacted by a technology company, asking if I was available to help them with a short term eCommerce project. As you know, we often do work for other technology companies, so I set up a call to discuss their needs. They have a client here in Delaware that is looking at eCommerce solutions, and retained the services of this group to help them complete their business analysis, prepare solution reviews, make a solid recommendation based upon their needs, and help with the implementation.

Since my company has worked with numerous eCommerce solutions, this was a project that was right up our alley. After a lengthy discussion, they asked if they could schedule a call with their “evaluator” to make sure this would be a good fit for the project. So, later on that day, this lady calls me from India to conduct her “evaluation”. Well, after 10 minutes on the phone with her, and all of the questions she was asking with regards to Magento Enterprise, I stopped her and asked if she was going to discuss other solutions. Her response was “I understand there are other solutions, though we want to recommend Magento Enterprise for this client, and want to make sure you know enough about the platform to make it stand out.”

I was stunned. Here is a company with a new client that has not conducted business on the internet before, and they want to recommend a solution that will cost the client a minimum of $15,550 in licensing fees right out of the gate.

I got off the phone with her, immediately called the project manager, and asked him if he could disclose some information, just to make sure we were on the same page. He said it depended on the questions, so I told him the primary one was “How many products does the client have?” He said “I believe a few hundred, though we haven’t gotten that far in the analysis.” So next came the obvious question: “Then why are you pushing Magento Enterprise?” His response was “They have both client and business facing needs, and Magento is what our people know.” At this point I was a little dumbfounded, so I asked the question that stood out in my head “If you have a staff that knows the system, why do you need me?”

Readers, the answer he gave me is one that drove home what I have preached about with regards to working with a company half a world away. He said “To be blunt, they are hesitant to work with an India based company, so we wanted a local American face there to work with them, and set their mind at ease about buying the solution we want to offer them.”

I said thanks for the info and hung up. The realization burning in my mind that all they cared about was selling the client exactly what they wanted to sell them at any cost, and in the process take more jobs away from Americans. It made me sick thinking about it.

If your company is getting ready to become a victim of these type of ram rod practices, stop before it is to late. I have seen way to many companies get sucked into this type of situation, and in the end it winds up costing them more than they ever imagined or budgeted for.

If you need help making a decision on a solution that is right for your business, we here at Delaware 302 can help. We will offer you honest unbiased advice, and help you choose the right solution that will not only fit your needs now, but one that can grow with your business.

Let’s build the future together.

 

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Up-charge aka Price Gouging

For those of you that know me, you know that I believe in being very open and honest with people, in both my personal life and in business. I am also not afraid to speak my mind, especially when it comes to something I am very passionate about.

The same belief is carried over to my business. Delaware 302 is built on both honesty, and offering affordable solutions to our clients. We set our prices lower than the competition because our business is about helping businesses grow, not how much money we can make. We also never charge our clients something they don’t need. Not every technology company has these same beliefs though.

What many people don’t know, is that my company is also the development arm for numerous technology companies here in Delaware. To date, we have 4 that we work with on a fairly regular basis to build web sites and applications, host, and create graphic designs for. This is actually a fairly common practice when a technology company doesn’t have the staff or resources to handle the work.

This has led to numerous challenges that we have had to address, the primary of which is maintaining the illusion of being the technology company that the contract was signed under. The other one, which is the focus of this post, is pricing.

As I said in my opening, not every technology company has the same beliefs as we do. We have watched in disbelief as companies we did business with in the past took our project scopes and quotes, and up-charged the work as much as 115%. I will point out I did say DID work with. We no longer do business with these companies because of their practices, and insane price gouging to make as much money as they can from each bid.

It is the client that ultimately suffers from this practice that has no rules or regulations in place to stop it. Web site solutions, and the prices charged, seem to be at the complete whim of the company quoting the build. The type of client, and the perceived revenue stream they have also comes into play. Many technology companies charge more if the potential client is a well know store, law firm, or financial company, compared to a local mom and pop shop or a start up.

To drive my point home on this, I will share with you a recent project we quoted for another technology company. The client is a fairly well known company with locations in both Delaware and Maryland, and they wanted a new web site. I was invited to attend the meeting with the client’s marketing person, and she came to the meeting prepared with research she had done on their competitor’s web sites, and a wish list for the new site based upon this.

Armed with her research and wish list, we scoped out the project, calculated in the needed custom development, and wrote up a quote. We then sent the quote over to the technology company we were working with, so they could work it into their proposal. About 2 weeks later the owner of the technology company called and said the client had some sticker shock, and asked if we could cut our prices on the project. I came to find out shortly after that call, that they tacked on almost $11,000 to my quote.

I was in shock when I found this out. Who in their right mind would up-charge 115% on a site build when they are doing absolutely nothing, except generating a contract. Then have the brass ones to call me and ask me to cut my prices on top of it.

No wonder companies have such a bad taste left in their mouth when dealing with technology companies like this.

At Delaware 302, we strive to be different. We charge the same for our solutions no matter who the client is, without any up-charges. We also offer the same level of exceptional service to all of our clients.

If you are ready for a change, contact us and let us help you build a solution that works for you.

Let’s build the future together.