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Fixed renewal rate for customers when buying new license

ACME is looking to evaluate a new application platform and invite HCL, Microsoft, SAP to do a presentation and POC. Since there is a strong competitor, each company will no doubt try to give the best discount they could. Let's say that after evaluation ACME chooses company X in part because they can give a 50% discount for a three year license. Implementation is underway, product is installed and customer is happy.

Roll forward on year 5, on their anniversary ACME got a renewal quote with 50% of their buying price. Management is surprised because this is double what they pay last year. Furious negotiation is made, but Company X are not willing to match last years pricing.

At this point, what usually happen is either

  • ACME pay the renewal but management is heavily dissatisfied and start looking for alternative platform
  • Management refused to pay and order IT to start evaluating alternative platform

Either way, this is a loss for company X

Can HCL avoid this scenario ?

Tinus Riyanto - Prisma Global Solusi

PS : I understand that all company wanted to recoup the money they "loss" when they give discount but doing it this way will hurt the trust and relationship and it will take a few years (if ever) before said customer is willing to do business with the same company again. I can even guarantee that the above scenario has caused many customer to move away from Notes/Domino

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  • Jul 19 2019
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