You don’t get the price of Social Business if you don’t understand its value

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Everything comes with a price. You can never gain something if you don’t sacrifice something of equal value.

Some of you might have experienced, just as I did, the start of corporate websites in the 90s. A comment that echoed throughout those years was: “Should we pay this much for a website? My son/ kid next door / nephew / vaguely related other person can do that for 20% of this price”. Especially since the creation of websites was seen by some as nothing more than pushing buttons in Macromedia Dreamweaver  or Microsoft Frontpage (or Microsoft Word and save it as HTML…). People had a hard time to grasp the new set of competences that was required and they did not understand what value these competences would bring them. Since for them it was just doing a bit more advanced word processing.

20 years later: same paradigm

Fast forward 20 years since the rise of corporate websites: not so much has changed. Social Media is often seen as doing something on Twitter and Facebook and is more than often a job for an intern or a secretary. Selling professional services in the social media space or selling Enterprise Social Software is a tedious job, since it is more expensive than the license fees for Microsoft Office or for the SAP Product line and of course more expensive than the $0.99 apps on our smart phones. So our general assumption is that Social Software is overpriced. It is too expensive, since the price-level of commoditized software has become our baseline.

Every time there is something new, we tend to compare it to the things we already have and are already commoditized. And by doing so we create a false comparison. Since by comparing it to the old things we assume that the new thing will deliver an identical value to what existing tools are leveraging and since that is the assumption, it shouldn’t be more expensive than the baseline. It is hard to understand that the new thing might deliver more value or a different kind of value, since that is something new we haven’t experienced before.

Appreciate value, accept price

If you can grasp the value, you can understand the price. It doesn’t necessarily means that something with high value should always be priced for a premium, though something that is priced relatively low and promises to deliver a premium might be suspicious. No matter if the price is high or low, focus on the value that is delivered. Ask your vendor to explain the value to be delivered and ask for proof of this value. Don’t be penny wise and pound foolish. You were planning to spend money to achieve a certain goal, te get to a certain level of value. Spending less money doesn’t always mean that you save money, especially not on the long run.

Social in general is a transformational change and transformations are seldom done in a week. Focus big picture, focus on value. If the value is right, most often you can justify the price to pay. If you can prove the value, then you have already more than 80% of your business case for investments. Don’t be persuaded by pricing, a low price doesn’t mean a good deal, nor does a high price means high quality. Focus on value, be rational.

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