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Re: [XP] No customer-side iterations means trouble

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  • Ron Jeffries
    ... Perhaps your competitors charge for fixing problems, or don t fix them? You could explicitly guarantee that you ll fix all defects, or something a lot like
    Message 1 of 8 , Feb 28, 2006
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      On Tuesday, February 28, 2006, at 4:50:58 AM, Paolo "Nusco" Perrotta wrote:

      > Unfortunately, I'm not talking from a theoretical point of view. This is
      > exactly what is happening in my Country right now. Software houses tend
      > to hire very cheap, unexperienced people. I heard many companies
      > formulating this explicitly: "We don't need experienced developers, we
      > need developers within our budget". Of course, there is wide distrust of
      > software development because of that. Still, that's the market for us.
      > Other than moving abroad, I wonder if I can do anything about it. How
      > can I make a promise of quality before the system is built?

      Perhaps your competitors charge for fixing problems, or don't fix
      them? You could explicitly guarantee that you'll fix all defects, or
      something a lot like that.

      If there is distrust in your software development market, that means
      there must be horror stories out there. You could visit some very
      dissatisfied people, find their stories, use them in your
      advertising and promotional material, devise real ways to help your
      customers avoid these problems and make them part of your pitch.

      You could reference the vast literature on risks and project
      problems, converting other people's problems into your great
      company's solutions.

      Generally these deals are not closed on price alone. Your market is
      aware of the problems, you've told us. That means there are things
      that can be said, truthfully, guarantees that can be made, to allay
      the fears that your prospects have.

      Moving abroad sounds unnecessary to me -- you have a market that is
      dissatisfied and therefore ripe for a new way of doing business.
      Someone will capitalize on it -- might as well be you.


      Looking at the above, just typed in in a few minutes at 0530, it
      seems to me that there are lots of potentially effective actions you
      can take to secure good customers. When you satisfy them, get
      references to use with the next ones. This could be your chance to
      rule the country, if not the world.

      Tell your story, again and again. Figure out why it doesn't work,
      refine it, tell it again. Deliver the best you have, always. To me,
      that's what works.

      More discussion is most welcome ...

      Ron Jeffries
      www.XProgramming.com
      In programming, do, or undo. There is always try. --Yoda
    • Steven Gordon
      Maybe, you should target customers who have been burned by your cheap competitors and market the difference in your approach. Some things that might be
      Message 2 of 8 , Feb 28, 2006
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        Maybe, you should target customers who have been burned by your "cheap"
        competitors and market the difference in your approach. Some things that
        might be attractive to customers who have experienced the low quality, the
        time and cost overrruns, and the expensive change orders perpetrated by your
        competitors:

        1. Guaranteeing working software every 2 weeks for a fixed price per
        iteration
        2. Allowing the customer to make changes to requirements and their
        priorities every 2 weeks
        3. Allowing the customer to cancel at any time and receive the working
        code (they have to pay down their total bill, of course)


        If you find you still cannot generate business this way, you could take #2
        off the table and use the charges for the inevitable changes to justify
        bidding lower, but it will effect customer value and satisfaction in the
        long run.

        Steven Gordon

        On 2/28/06, Paolo Nusco Perrotta <ml@...> wrote:

        >
        > Now let's see what your competitor is doing. They have another approach
        > to keeping their prices low: they hire cheap people. They'll have lots
        > of defects, they'll be overtime, and in the end the customer will
        > probably be sorry. Still, they'll be very competitive when it comes to
        > winning the client in the first place. If demand is low, they'll
        > effectively win the market.
        >
        > Unfortunately, I'm not talking from a theoretical point of view. This is
        > exactly what is happening in my Country right now. Software houses tend
        > to hire very cheap, unexperienced people. I heard many companies
        > formulating this explicitly: "We don't need experienced developers, we
        > need developers within our budget". Of course, there is wide distrust of
        > software development because of that. Still, that's the market for us.
        > Other than moving abroad, I wonder if I can do anything about it. How
        > can I make a promise of quality before the system is built?
        >
        > Paolo Perrotta
        > Bologna, Italy
        >


        [Non-text portions of this message have been removed]
      • William Pietri
        ... With any product, a lot of people are mysteriously happy to buy rank garbage if they can get it at 30% off. I can think of a few options while still
        Message 3 of 8 , Feb 28, 2006
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          Paolo "Nusco" Perrotta wrote:
          > Now let's see what your competitor is doing. They have another approach
          > to keeping their prices low: they hire cheap people. They'll have lots
          > of defects, they'll be overtime, and in the end the customer will
          > probably be sorry. Still, they'll be very competitive when it comes to
          > winning the client in the first place. If demand is low, they'll
          > effectively win the market.
          >
          > [...] Of course, there is wide distrust of
          > software development because of that. Still, that's the market for us.
          > Other than moving abroad, I wonder if I can do anything about it. How
          > can I make a promise of quality before the system is built?

          With any product, a lot of people are mysteriously happy to buy rank
          garbage if they can get it at 30% off. I can think of a few options
          while still maintaining quality:

          1. Become known as a high-quality producer for discerning buyers. For
          this, study the way other high-quality brands work. For example,
          Apple is very interesting, as are the high-end car companies.
          2. Directly sell to the distrust. Tell them you're different, tell
          them why, and then offer to prove it in ways your competitors will
          fear to match. Like weekly deliveries, the ability to terminate
          the contract at any time, and a 100% money-back guarantee for the
          most recent 30 days of work, even if they previously accepted it.
          3. Lie as much as they do. Promise miracles for pennies and then make
          it up in change fees, skimping on features, adding additional
          charges for this and that, and using all the other tricks your
          competitors use. Except low internal quality, of course, as that
          costs you just as much as them.


          Personally I work from 1 and 2. My feeling is that people who insist on
          making foolish purchasing decisions are in need of an education about
          themselves that I can't provide them. After they have been burnt a few
          times, I find them much more amenable to listening. There have been
          times that I have managed to catch clients who still needed that
          education, and I've never found them worth the hassle.

          However, I've seen large, successful companies work from #3. In
          particular, I saw one company spend $5 million with a major consulting
          firm and get only a half-working system just as the client's clients
          were expecting service, service based on contracts with large penalty
          fees for problems or delays. The consulting company then stopped work in
          the middle of all of this because it was a time-and-materials job, and
          the money was up. They didn't come back until *another* $5 million
          contract was signed.

          It made me ill to see it happen, but honestly, they deserved one another.

          William


          [Non-text portions of this message have been removed]
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