How can you can minimize discounting and protect your services revenue and margins in the face of real and often intense pricing pressure from customers? This issue has been the focus of in-depth study and analysis by the SSPA Committee on the ROI of Maintenance and Support. Nearly twenty industry leaders like Jeremy Sparks, Senior Manager of Support Planning and Marketing at Siebel Systems, Suzi Pike, Executive Director of STAR Support at McKesson Corporation, and Brigitte Carrabin, Director of International Product Support at Fair Isaac Corporation have spent the last six months understanding and dissecting the problem. Armed with stacks of data collected through interviews, industry surveys and a customer focus group, the SSPA ROI Committee has reached its conclusion. You can stem the discounting tide.

So what does it take to fend off today’s savvy and aggressive technology services buyer? While there is no single or simple panacea, the committee has identified a number of offensive strategies and tactics that companies can use. Key amongst these is a core characteristic that it has labeled the “culture of services value” that exists inside companies who are successful at minimizing discount concessions with customers. “Successful companies are building a culture of value around their support services and are willing to defend that value with their customers,” says Sparks, a services industry veteran. The culture of value starts at the top and permeates all levels and functional areas within the services organization, and indeed, the company overall. In short, it boils down to strong and unwavering management commitment to services at every level of the business.

Additionally, the ROI Committee has singled out a number of best practices that, when executed inside companies that possess the culture of services attribute, create a strong barrier to the pressures and aggressive tactics of cost-conscious customers. These include centrally managed and rigidly adhered to discounting policies and compensation practices that not only reward selling services but carry the double punch of penalizing reps who discount services. Other best practices have been identified in the areas of internal sales policies, sales training and organizational structure. Of course, these practices alone aren’t enough to keep services vendors out of the pricing penalty box; strong execution on service delivery and a robust feature set weigh in heavily when it comes time to negotiate services contracts.

Eager for more? While we’ve only scratched the surface here, you can learn more in an upcoming series of SSPA Members-only deliverables that will present the Committee’s findings in detail, including a white paper that covers the issues and best practices in depth. We’re also developing a new Members-only maintenance and support ROI tool in collaboration with Kotler Marketing, leaders in value and ROI-based sales and marketing. The white paper and ROI tool will be available in the early fall. Additionally, the SSPA will host a series of pay-per-view webcasts for Members and non-members that will cover the issue in detail. Dates will be announced in late August.

Finally, individuals who attend the SSPA Conference in New Orleans in October can attend a track session where the findings and recommendations will be presented by a team of Committee members who will be on hand to discuss the results and answer questions.

Do you have an idea for a new SSPA Industry Committee? Would you like to get involved in the next SSPA Committee? If so, please send an email to Trisha Bright, Vice President SSPA Member Programs at tbright@thesspa.com.