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How can you determine the value of a software license?

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Determining the value of a software license is a crucial skill for technical sales professionals, especially when negotiating with customers or vendors. A software license is a legal agreement that defines the rights and obligations of the parties involved in using, distributing, or modifying a software product. The value of a software license depends on several factors, such as the features, benefits, costs, risks, and alternatives of the software. In this article, you will learn how to assess these factors and calculate the value of a software license for your business or your client.

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Gerard Campillo Madrid

Ayudo a las empresas en lo más importante, las personas. En Starda ofrecemos tecnología y servicios para llevar a las…
Jorge Domingos

Analista Pleno de Marketing na SmartPLM
Iago Marinho

CVG

1 Features and benefits

The first step in valuing a software license is to identify the features and benefits of the software product. Features are the specific capabilities or functions that the software provides, such as speed, security, scalability, or integration. Benefits are the outcomes or results that the software delivers, such as increased productivity, reduced costs, improved quality, or enhanced customer satisfaction. You should list the features and benefits of the software product and rank them according to their importance and relevance for your business or your client. The more features and benefits the software offers, the higher its value.

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Gerard Campillo Madrid

Ayudo a las empresas en lo más importante, las personas. En Starda ofrecemos tecnología y servicios para llevar a las empresas y las personas a otro nivel. #HR #HCM #HXM
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Que nuestro potencial logre valorar el valor de nuestra solución es una de los primeras metas que nos debemos marca. Ayudarles a ponerle precio a cosas que obtendrán y a día de hoy no tienen te ayudará así como a?adir el ahorro de tiempo en diferentes tareas que no se traduce únicamente en el coste de los empleados si no que hay que sumar el valor de tener la tarea antes.

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Iago Marinho

CVG
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Ao considerar esses fatores e alinhar o valor percebido pelo cliente com o pre?o proposto, é possível estabelecer uma estratégia de precifica??o que seja justa e atraente para ambas as partes.

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2 Costs and risks

The second step in valuing a software license is to estimate the costs and risks associated with the software product. Costs are the expenses or investments that you or your client have to incur to acquire, implement, maintain, or upgrade the software. Costs may include license fees, installation charges, hardware requirements, training expenses, support fees, or renewal costs. Risks are the uncertainties or potential problems that may arise from using, distributing, or modifying the software. Risks may include security breaches, compatibility issues, performance failures, legal disputes, or obsolescence. You should calculate the total cost of ownership (TCO) and the return on investment (ROI) of the software product and assess the level and likelihood of the risks. The lower the costs and risks, the higher the value of the software license.

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3 Alternatives and competition

The third step in valuing a software license is to compare the software product with its alternatives and competitors. Alternatives are the other options or solutions that you or your client have to achieve the same or similar goals as the software product. Alternatives may include existing systems, manual processes, or different software products. Competitors are the other vendors or providers that offer the same or similar software products as the one you are selling or buying. You should evaluate the strengths and weaknesses of the alternatives and competitors and determine how they affect the demand and supply of the software product. The more unique and superior the software product is compared to its alternatives and competitors, the higher its value.

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4 Negotiation and communication

The final step in valuing a software license is to communicate and negotiate with the other party based on the value proposition of the software product. A value proposition is a statement that summarizes the features, benefits, costs, and risks of the software product and explains why it is the best option for the other party. You should craft a compelling and persuasive value proposition that highlights the value drivers and addresses the value concerns of the other party. You should also use effective negotiation and communication skills, such as active listening, empathy, rapport, questions, objections, concessions, and closing techniques, to influence the other party and reach a mutually beneficial agreement. The more you can demonstrate and communicate the value of the software license, the more likely you are to close the deal.

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5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Jorge Domingos

Analista Pleno de Marketing na SmartPLM
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é relevante na negocia??o de licen?as de softwares, apresentar aos clientes uma vis?o clara do Retorno sobre o Investimento (ROI). Mapear de maneira precisa os ganhos potenciais de produtividade com a implementa??o fornece uma abordagem tangível para a decis?o de compra, e estabelece uma compreens?o clara do break-even. Essa abordagem baseada em dados fortalece a confian?a do cliente e permite tomadas de decis?es assertivas sobre a viabilidade e os benefícios de longo prazo com investimento nas licen?as. Ao alinhar as expectativas com resultados mensuráveis, estabelecemos uma base sólida para uma parceria duradoura e mutuamente benéfica.

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Cesar Duque Segundo

Consultor de Transforma??o Digital | Executivo de Inova??o Digital | Senior Advisor | CCO | BDM | Processo Empresarial | Industrial | Indústria 4.0
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N?o vou recordar os valores, mas certa vez desenvolvemos um software inovador que reduzia 35 dias de processo (na indústria cal?adista), além de estrategicamente reduzir brutalmente o tempo de lan?amento de novos produtos no mercado. Nosso custo era baixíssimo! Nao tínhamos concorrente para embasar pre?o, ent?o fomos conversar com um cliente em potencial. Ele nos ofertou um pre?o substancialmente maior que qualquer outro software ja conhecido, porém teríamos que dar 5 anos de exclusividade para ele dentro do mercado (share) dele. A percep??o de valor do cliente nao depende somente dos ganhos diretos em tempo, custos e produtividade, os ganhos estratégicos no mercado dele trazem muito mais valor para a precifica??o do software.

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How can you determine the value of a software license?

1

2

3

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5

1 Features and benefits

2 Costs and risks

3 Alternatives and competition

4 Negotiation and communication

5 Here’s what else to consider

Technical Sales

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How can you determine the value of a software license?

1

2

3

4

5

1 Features and benefits

2 Costs and risks

3 Alternatives and competition

4 Negotiation and communication

5 Here’s what else to consider

Technical Sales

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