Microsoft Street Pricing & Sales Tactics
Published on 25 Feb 2021
Microsoft stands alone when it comes to incumbency and sales readiness. It is hard to imagine a more prevalent enterprise solution or a more thoroughly prepared sales force. By design, this one-two punch effectively renders most buyers powerless in deals with Microsoft. Only with diligent planning can Microsoft’s aggressive “T Minus 36” sales methodology be countered.
Microsoft offers a wide range of pricing to their customers. In 2019, ClearEdge examined a 2.5x price variance between customers who held leverage during negotiations and those that did not. This shows how understanding a competitive Microsoft price point and why creating a negotiation strategy is pivotal to achieving a competitive outcome.
Pricing Methods Microsoft Uses:
Before the ink is dry on your current deal, Microsoft reps begin using an internal T-36 play book to begin building leverage and positioning products to increase revenue in your next deal. The long runway enables the company to gain insight into your organization and figure out exactly what to sell you and how much more they can charge at renewal time.
Like those of many other software vendors, Microsoft’s pricing strategy is based on capturing as much revenue in a transaction as possible. Depending on your leverage in a negotiation, you could get a completely different discount for the same size purchase as one of your peers.
Microsoft drives up prices in three ways: product bundling, inflating your demand, and running out the clock. The first two are intended to obfuscate what you’re buying and prevent any apples-to-apples comparison with competitors. The third tactic plays to the buyers’ fear of not reaching a deal before support for your existing environment is withdrawn.
Microsoft Sales Tactics:
- Product Suites
- Demand Inflation
- Run Out the Clock
How to get a good deal with Microsoft
All successful Microsoft deals have one thing in common: they occur when the customer addresses the sales rep’s main motivations. Due to compensation structures and quota initiatives, certain deal scenarios hold more weight than others. ClearEdge has compiled a list of the top three current Microsoft incentives.
- Cloud Consumption
- Azure Commitments
- Incentivized Products
It is impossible to overstate the need to start early against Microsoft. To boost your chances for better pricing, create a conservative demand model before the supplier comes calling, examine other options to Microsoft’s solution, and understand the sales rep’s incentives before any meeting occurs.
Download this whitepaper to learn more about Microsoft's pricing tactics, ways to achieve competitive discounts and mitigate risk.