This week I am working hard on several items for next week – the Ingram Micro Webinar, Undeniable Justification Using Security Assessments, and another Pre-Event Webinar introducing my new ebook and workshop, 7 Secrets to Profitability Using Lunch & Learns and Sales Events (Now sold out – but get on the waiting list!). It’s a busy week – both are coming along nicely and I am looking forward to meeting with you next week to air this important educational material. While preparing and working with the folks at Ingram to get our program organized, I’ve had numerous conversions with clients who use assessments in their sales process. Some are paid for, and some are complementary…Here’s a tip I think a lot of people are missing on fee-based assessments, and as a result, are leaving money on the table – The Security Assessment Subscription. This is something I started doing years ago while selling assessments, and it made a huge difference in both the gross profit I realized and the follow-on project work.
Security Assessment Subscriptions
An assessment measures risk – it’s a measure of impact vs. likelihood. The problem is, it’s a point-in-time measurement, so once it’s over, the risk levels will change over time, and by the time the client decides to do it again, gets it approved, and signs a contract, a year will have gone by. On top of this, many of the remediation recommendations you made will be forgotten long before they make their way through the approval process. You’ll be lucky if they take one of two of your recommendations and actually carry them out. What about the other 4 or 5 critical issues? And then there’s the long list of things that should take place that just never will.
When I started selling assessments, I did something I’ve not seen done by other sales reps. I turned each assessment opportunity in a subscription offer. When an assessment opportunity came up, I worked through the sales process as usual, but then on my proposal, I made it an option to do it as a subscription. I would charge a flat fee for the assessment, let’s say 30K. Then I would tack on a subscription fee of 5K to update it over the next three quarters. Since the documents already exists in the 30K project, there is no need to rewrite the document. The scope is fixed based on the original project. So all we had to do was go in and revisit the original scope – updating new issues, noting remediation recommendations that were never followed, and adjusting the areas they did remediate. The 5K may not represent a great deal of added GP…in fact, it’s kind of a break even deal…but…
- It kept me in front of the decision makers for year.
- Gave me a chance to remind them to follow through with the recommendations.
- Allowed me to uncover new problems requiring attention.
- Made me first in line when an issue did arise.
- And allowed me to stay on top of any new opportunity that might affect the state of security. (Meaning all new internal projects).
- It also allowed me to possibly expand the scope, resulting in a fee increase.
The 5K was large enough to cover my cost, keeping me in there over the year. It was also small enough to create a competitive edge when others proposed their assessments against mine. I was the only one thinking about the year – ongoing security. I proposed it as the default offering, meaning the client had to check a box to not include it, rather than having to add it. That may sound like a manipulation tactic, but the truth is, the company should do it by subscription. Security assessments should be done quarterly. I learned this from the pest control people. Try hiring the termite guy to come out for one visit. He won’t do it. They sell their program by the year, not the visit. The reason is, one treatment isn’t enough…the same is true of the security assessment.
Don’t miss this webinar next Wednesday….I’ll be giving a number of insightful tips like this one to help you grow your business.
© 2012, David Stelzl
2 thoughts on “Multiplying Your Assessment Revenues”
A great read. A great concept. I forwarded it to my i3 team with the comment: “Why didn’t I think of that?” We’re developing new security related products and I have a fixation on recurring revenue. Risk & Security Assessment Subscriptions are now on the product development list.
I look forward to hearing how it goes – yes, recurring revenue is the key!