I run a consultancy which operates within a niche software domain, we are a team of 30+ working to help some of the biggest brands ship better software faster. We have built a good reputation, we price fairly, we value every client from small to large and do a great job that lasts long after we have gone.
Now, every year, there is an internal debate about our rates and their competitiveness. Statements that come up are:
- Our competitors charge more than we do, we need to charge more!
- The more work we do, the more expert we become so we should increase our prices
- Our exclusive partnerships mean we should charge a premium for that expertise
- Does being cheaper than our competitors indicate we are not as good meaning we giving the wrong impression to our clients?
As the ‘commercial guy’, I am focused on making the company as profitable as possible. However, I believe that the synergy between premium and price is not what it used to be and there are reasons why our competitors charge more; reasons that most clients don’t appreciate.
To explain this, as a fan of watches, I believe Christoper Ward is the perfect example of getting what you pay for, doing away with gimmicks and (expensive) marketing to focus on affordable quality…
Ever since I was given my Grandad’s Seiko at the age of 5, I have had a keen interest in watches. At school, I had my token ‘Tag’ (replica), I used to explore the local car boot sales for random watches and then when I started working, I began to think about saving for a luxury watch. My first purchase, 10 years ago, was an Omega Seamaster this grew to include some limited edition brands, a Speedmaster and a Seiko ‘Snowflake’ (this is another example of quality over brand).
About 2 years ago I was thinking about what next and had my eye on an Omega or Rolex. I spent months looking at different ranges, browsing forums on ‘this vs that’ and ‘that vs this’, then I saw someone mention Christoper Ward. I had never heard of them before which was strange considering I love watches. So I decided to dig a little deeper and find out more. After reading their story, I instantly connected as this is how I run MagenTys too:
Shaking things up
From the start our goal was to bring premium watches to as wide an audience as possible. And we’d do it by selling directly from our website to the customer with no expensive marketing campaigns (or celebrity endorsements!) and third-party retailers involved.
We also determined to treat our customers the way we’d want to be treated – with openness, efficiency and care. Many of them have become more like friends than consumers.
A pricing revolution
Our pricing model has been the same since day one. We design in-house, use the best possible components, calculate the cost of the watch and multiply it by three to get the selling price. This allows just enough margin for us to make a fair profit. It also means our watches are up to a quarter of the price of equivalent ones from our more famous Swiss competitors.
We didn’t know it at the time but apparently we “disrupted the industry” with our approach to selling ‘proper’ watches.
Needless to say, I went ahead and ordered my Trident Pro and I wasn’t disappointed! The quality of the bezel, the hands, the strap and overall feel of the watch was genuine luxury. In my opinion, it was better than the Omega at 1/3 of the price. A year later I purchased the Rapide which has replaced the Speedmaster and again I was not disappointed, this came at 1/4 of the price!
The reason Christopher Ward can do this is that they don’t pay Roger Federer or Keira Knightly and they don’t spend money on lavish underground campaigns or Christmas TV ads; they just build quality products that sell for what they are worth, meaning I am getting far more ‘watch’ for my money.
This brings me back to MagenTys and our pricing vs our competitors. We offer a premium service that delivers high results. Yet, unlike our competitors, we don’t have the aquarium in the foyer, we don’t have a top-heavy team of Sales, Marketing and Bid Managers allocated to every opportunity and we don’t have 10,000 branded mints or umbrella’s sitting in storage; we just have a very good team of people who do very good things that our clients need.
So just like Christoper Ward, our fair pricing isn’t because we are ‘the budget option’, it isn’t because we are less experienced and it isn’t because we are trying to ‘enter the market’. It is because we charge what our services are worth for your business and not inflating them to pay for our marketing wizardry or corporate gifts.
I hope more SMEs take this approach and begin to disrupt the IT Consultancy industry through fairer pricing. This should lead to clients recognising that when they invest their £50k, £5m, £10m or £250m+ in Maturity Assessments, Coaching, Tooling Expertise or Digital Transformation projects with a ‘big consultancy’, they could most likely get a better service, from a company that cares, for a fraction of the cost!
Marketing Executive at MagenTys