It’s happened to every one of you “service providers” out there. You have a wonderful, unique offering and were able to pick up some great big clients. They came to you because you were the best, or maybe you went to them and got lucky. Either way they signed right? And now they are using your wonderful product, and everything looks like it’s going to be great. After all, you are providing something that they can’t do for themselves right? What’s why they are willing to pay the big bucks for your premium package…

Yeah, wrong. Usually when you sign someone who is big enough for the situation above to ring true, they absolutely can do what you do. They just don’t want to. Maybe it’s time, maybe it’s money, maybe you are just their first step into a new area. Why is this important?

The fact of the matter is that third parties are almost always more expensive than in-house solutions over the long run. There are exceptions of course, and those are great, but in my experience this is the case. Many times the partnership is really a stepping stone, because it’s much faster to throw data at someone that already has a solution in place than it is to build something.

What you have to remember is that sooner or later your client realizes, “Hey, we already have all the data they do and more, why do we need to keep paying them to do ____? Let’s just build that functionality ourselves, and save $XXX,XXX next year. When does that contract expire?”

Know what really triggers this? If during the time you have been working with someone, you don’t develop anything new. If is going to continue to pay for another year, you had better have shown them something worth paying for.

The same product should probably not exist for longer than 4-6 months without a major upgrade, because that’s how fast things have to change online. Any slower and you become totally obsolete.

So what’s the point of this rant? If you are selling services or products to another company, either make sure you are fully patented, or you continue to add value. And I mean constantly. Upgrade your products, provide free (and useful) consultation, introduce new solutions – I mean what are you doing with all the money you are paid? Otherwise, sooner or later you will slide right off that gravy train you’ve been riding. (I’m not really sure what that means. Gravy is slippery, yes, but why on earth would you have enough gravy that you would need a train?)


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