Molecule Software Blog

The Molecule Software ETRM/CTRM Blog

Fixed Fee ETRM/CTRM Pricing For The Win

Molecule bids every ETRM/CTRM opportunity on a fixed fee basis. That is how we bid, every time, unless the customer requires a different price structure.

You might wonder why E/CTRM price structures - and getting a clear understanding of the total cost of ownership - have traditionally been complicated and hard. It's because early market participants have indoctrinated customers to believe fixed-fee pricing is impossible. They continue to win contracts with initial low bids that exclude T&E and do not cap costs (including implementation) because that way the numbers look appealing - at first glance.

Pricing Transparency for E/CTRMs

First, let's look at what our fixed fee includes.

Molecule's pricing includes:

  • Implementation - in about 90 days for main features
  • Feature updates - typically two releases per month, so our customers consistently wake up to modern tech
  • Support - provided by in-house Molecule employees with industry experience

Would we include building a MAJOR new feature you are dying for in that fixed fee? It depends.

We typically strive to meet your current needs and triangulate your requests with what everyone else is asking for. If it fits in our roadmap, you'll get the feature – typically at no cost, when it's ready.

If there's something you need yesterday and want to jump the queue, we'll discuss it with your team. If it makes sense, Molecule can custom-build a solution for you, which will come with a one-time charge. Although this scenario doesn't come up often, we're flexible when it does.

Why Doesn't Every Customer Demand a Fixed Fee Price?

At a glance, the pricing submitted by vendors that refuse to bid on a fixed fee basis can look better.

Let's look at some numbers over the life of a five-year purchase:

  1. Molecule bids $180k/year = $900k over five years for our 100% SaaS, multi-tenant cloud solution. Implementation, feature updates, and support are all included.
  2. A competitor bids $130k/year = $650k over five years, plus a one-time "estimated" implementation fee of $200k, plus support and maintenance at $100k/year.

At first glance, option 2 looks much cheaper. But it doesn't take a math whiz to see that the support and maintenance fees ($650k + $200k + (5 x $100k)) quickly make option 2 the more expensive proposition. In a post-COVID world, saving that $450k - and likely much more - could pay for a new hire or faster computers or bigger bonuses.

But, what if we take the $200k estimate as what it is – a minimum? What if (and this usually happens) the floating implementation fee doubles, triples, or quadruples?

ETRM/CTRM history is filled with legendary examples of uncapped, "estimated" implementation fees ballooning catastrophically. Mansions have probably been built and yachts purchased thanks to implementation fees.  And it's not just cost, but also the headaches accompanying out-of-control implementations. The real total cost of problematic pricing is often found in the rearview mirror.

For example, one of the best inbound leads Molecule has ever received was this (names redacted to protect the innocent):

"I was the business lead on an ETRM project where we swapped out a dated ETRM system called [very old competitor] with a newer one called [.NET competitor]. It was a bloody nightmare and I am scarred for life."

What Can You Do to Protect Yourself?

Evaluate bids in an apples-to-apples comparison. Dig in and understand what a "one-time implementation fee" could really end up costing. Understand the risks associated with that "no cap" provision.

And, always ask for a fixed fee. Every time. Get it in writing.

Fixed fee: for the win.

Selling Against a Fallacy in ETRM/CTRM Software

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ETRM: Build vs. Buy

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