PRODUCT OFFERING RISK

The degree to which the product offering needs customization will determine the level of risk on a sale.

 

 

The degree to which the product offering needs customization will determine the level of risk on a sale. Customized or heavily customized offerings carry a greater risk than standard offerings. Be aware that customization doesn’t necessarily mean change to the software but could mean non-standard support offerings, non-standard contract details non-standard data retention etc. All of these add complexity and hence risk.

Amplifying Factors Industry Location

RED – Heavily customized.

 This is where we see a poor fit between your standard offering and the customer’s requirements and as a consequence, you need to bend your product or your service offerings, etc. significantly to meet the customers needs

AMBER – Customized

 Other factors surrounding the deals such as industry or business type may affect the need for customization. You need to decide if this is a good customization or does it bring you in the wrong direction.

GREEN –   Standard

Standard product is the best possible situation which your standard product offering, as well as your standard terms and conditions and service offerings all align with the customer needs.

Mitigation – what to do ?

Avoid heavy customisation wherever possible. Heavy customisation can frequently result in a deal dying late in the process. When the customer is educated throughout the sales process in the difference between what they’re asking for what they need and what your standard offering is. Consequently you may not be a good fit for their needs. It’s common that customer proceed to a late stage and you may not win the business

 

Work with the customer to decide between “must haves”  and “nice to haves”. Very often the customer will ask for something that would require heavy customisation and if you challenge the customer on it in the right way, they can frequently move to see your value in a lighter customisation or even standard offering and hence shift the conversation accordingly.

 

Move elements of his heavy customisation out to later phases. Work with the prospect to them to see the value that they will get from the standard or near standard offering and postpone heavy customisations to later phases. This reframes the conversation to a more collaborative place and increases the success for both you and the customer.

 

Be aware smaller companies with smaller budgets are often the companies that ask for heavy customisation because they are trying to do more with less, so be particularly keenly alert to such potential. Ask the customer straight questions and don’t be afraid to make recommendations get value first and then build on it as the needs arise.

 

 

 

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