Not Your Father’s ServiceNow
so I just want to take a few minutes to follow up on a podcast we did last week about ServiceNow they most specifically how they're changing right and so the reason why this matters most to us is because it's brought to our attention quite frequently when we're talking to current service mount customers who have long-standing relationships or coming to us and saying hey I have a renewal coming up in three months or even a year out and ServiceNow the way they're approaching us it's just different and they want to know two things one is that what we're seeing with other customers rights we get a perspective - are they being treated differently than others but - they want to know how to approach them - right sighs right and that's a key word which is the way you interacted with ServiceNow say three years ago it's different than the way you're gonna have to interact now to get the same or even a better deal right it's part of your renewal so what am I talking about we're seeing ServiceNow we're hearing customers tell us that they're being more aggressive and trying to push additional products into the ecosystem into the profile of the customer so they're going out to different parts of the business to do that right so when they introduced HR service delivery right is one of their cloud services they're approaching the HR department not just IT and so it's very important to be able to understand this approach so that you internally can offset that but also be able to use that as part of your renewal negotiations the last thing you want is to be able to come to ServiceNow and talk to them about what you want when they already know what they can sell you because they've already gotten buy-in from a particular department the other thing we're seeing is a lack of flexibility early stage ServiceNow they were very willing to be flexible right because they're trying to get market share they were trying to get penetration within a particular organization so that's an easy way to do it right so okay you're interested in this product you're not ready to adopt it what if we allow you to start your subscription six months in so you don't have to start day one right so they're gonna give flexibility phasing in these phasing in products we're seeing now whether your customers starting to adopt new products or their world has changed where they don't necessarily need as many users upfront anymore come renewal all of a sudden service now all that flexibility is going away right they're demanding and/or putting forth proposals that require upfront commitments even though you come to them and say hey just like last time three years ago we don't have a need immediately what can you do for us and B what you can do for us has significantly changed pricing discounting right aggressive discount to get in right to land and that discounting is going away and it comes in two forms there's the discounting they're willing to offer for the new products right so let's say you're an IT SM customer right so IT Service Management and you're considering IT business management or operations manager the ITM the upfront discounting they once gave you to get in whether again it could be old school right I TSA is going away so that additional volume discounting it's not as high anymore because they've already gotten buy-in right they've navigate the organization they provided value they have goodwill and they're seizing an opportunity to sell you more at a higher upfront price the other way this is happening is that renewal protections increases to your pricing so you may think you have a renewal protection but there's most likely conditions in there right requiring you to have certain products renewed or volumes of parts renewed in the past they may have been flexible they may have been able to accommodate this situation and still give you the protection you negotiated now they're holding the line which is okay if you're not gonna give me more you're not going to expand we're gonna unfortunately have to go more than that 7% price increase that you negotiated and they're coming in with very high significant increases because again they feel that they have the ability to do it and so lack of discounting or not as impactful discounting to motivate adoption we're seeing lots of lack of flexibility long term price protection this ability to give you a renewal protection on your next purchase is going away or they're putting up a fight right in terms of well you know we can do it but here's a list of conditions in addition to the ones we had before right so there's a change here and why don't we notice it and why are we more interested in what's gonna happen for our customers because a lot of our customers are also Salesforce customers right that's a perfect blueprint a blueprint that ServiceNow is clearly falling which is 2000 early 2000s let's get in the door let's build up goodwill let's get market penetration let's get penetration within an organization and then all of a sudden that changes those discounts went away for Salesforce customers they were less flexible their renewal protections were not as great right and so this is a theme and don't think that ServiceNow isn't following that same blueprint of success right to grow and they're growing and so as a customer you need to prepare yourself with market intelligence as to what other customers are achieving today not three years ago because the world has changed you also need to be prepared to organizationally approach service now with the right messaging the right story because like you've heard us say before the benchmarks the market intelligence matters but it's the story that's gonna matter most and as ServiceNow has changed you have to change as well you have to change your tactics you have to choose your renewal policies and you especially have to prepare at a longer duration pre renewal to get it done effectively
https://www.youtube.com/watch?v=nVJ-YwqdOeE