54% of SaaS suppliers on G-Cloud 9 had a fatal flaw relating to pricing information
This compares with 60% on G-Cloud, we may assume a similar proportion on G-Cloud 10
Half of SaaS suppliers celebrating getting on G-Cloud were actually Dead-on-Arrival
Most non-compliant suppliers are unaware they are in error – CCS have no duty or process to tell them
This article explains the type of errors and how to fix the problem
There are anomalies, but you can’t build a successful sales strategy on anomalous behaviour
Analysis of the Digital Marketplace in 2018 (2016) revealed that 54% (60%) of SaaS suppliers provided insufficient pricing information.
This is possible because “The Digital Marketplace team and the Crown Commercial Service (CCS) don’t evaluate suppliers or their individual services” and so a product can get onto the catalogue and yet be Dead-on-Arrival.
It matters because buyers are instructed to “… always look at the supplier’s pricing document to work out the actual price of what you’re going to buy.” and “You must not negotiate with suppliers about the details of their service. If it isn’t in their service description, you can’t ask a question about it.” [See the Buyers’ Guide]
If a buyer cannot calculate the cost, the rules apply to eliminate the service from further consideration.
What types of pricing non-compliance do we need to avoid in our offering? Here are examples I found in analysing G-Cloud 9 which echoed similar findings in 2016:
• No prices given or prices for essential components not given
• Pricing information qualified as ‘indicative’, references to unquantified discounts and configurations
• Pricing of essential components “POA”, “Quote” or “Contact us for details”
• Calculations that depend on factors a buyer cannot estimate
• Pricing is referenced to a website, a dynamic document or a calculator outside the catalogue
• Prices only quoted for an invalid contract term (e.g. 36 months)
• Provisions for price increases
• Price lists that are illegible or where the wrong document has been loaded in error
• “Pricing starts from £500 per user per month” and similar nebulous statements
For reference, 88% of SaaS suppliers on G-Cloud 9 had no sales on that framework in 2017. This catastrophic fail, not offering the full and open pricing the framework demands, is a significant part of the explanation. Discussing the problem with buyers and CCS it is clear that it irritates buyers and is one reason why some prefer traditional Invitation to Tender procedures. It is also clear that CCS had assumed we, the supplier community, would be brighter and learn why we are failing to make sales and correct our approach. CCS do hold education events and the clarification question/answer documents are full of guidance on the subject, but still 54% of suppliers are in danger of eliminating themselves from any procurement.
The good news: this catastrophic fail is one of the easiest to fix
Simply make a revision to your pricing data. Revisions are allowed and in my experience can be made quite rapidly – but there is a catch. Suppliers are not permitted to increase prices or make material changes to the service. This obstacle can call for careful navigation to ensure that CCS agree the facts – if they don’t, they can remove a service. So it may be useful to take advice from someone with experience of putting revisions to CCS.
Is that the whole story?
No, if you look at the data, some suppliers with bad pricing are making sales. I analysed the top 50 SaaS suppliers on G-Cloud 9 by sales performance (covering 80% of all sales made on the framework) and 30% (15 suppliers) were not compliant on pricing – they had significant omissions and in some cases provided no pricing data at all. I found several reasons for this anomaly. After many interviews with buyers, CCS and suppliers, I concluded that the following factors distort the logic of the argument:
- Some suppliers hold monopoly power in a particular niche
- In some cases there is ‘lock-in’ from earlier purchasing decisions
- Expediency has led to the rules being ignored
- Collusive behaviour between buyer and seller
- Mistakes and misunderstanding on both sides
The majority of suppliers attempting to improve their sales performance on G-Cloud are not monopolists or exercise powers of lock-in or have a globally marketed, ubiquitous product (and a take-it-or-leave-it price). Neither will they want to pursue a sales strategy dependent on finding buyers who don’t understand the process.
These are anomalies and the message to an SME attempting to succeed on G-Cloud is to get conformant and publish full pricing. There is no sensible, repeatable sales plan that relies on anomalous purchasing behaviour.