Know your deal!
When negotiating 
with a client about a deal it would be foolish to see it in a single dimension: " how much". There are many factors at work: Price, Delivery Schedule, Product Options, Service/Support, Training, Contract Duration, Contract Volumne, Payment Terms and Resources, just to name a few. E.g what point does it have to find a birthday cake supplier who is a cheaper, if he can't deliver in time. The factors are interdependent, so altering one dimension in a proposal or request will most likely influence one or more other factors. One example is shipping of goods: if you want your stuff faster (Delivery Schedule), your price on the logistics component goes up. A customer who tightly manages the cash flow can be enabled to commit to a larger contract volume if the payment terms can be adjusted to their management practises. Visualising the specifics of a deal can help to gain clarity in preparation of negotiation sessions.
If the problem you will solve for the client is critical for their business then price might not be the primary driver anymore. Speedy delivery, capable implementers and fitness for purpose take centre stage. Only with clarity about the situation you can spot these opportunities. Eventually you need to educate your customer on the priority of the other parameters.
All charts have been drawn using the rGraph HTML library.
A variation of the multi-dimension chart is the old IT joke: "We can make your software fast, cheap, bug-free - pick any two".
As usual YMMV.
with a client about a deal it would be foolish to see it in a single dimension: " how much". There are many factors at work: Price, Delivery Schedule, Product Options, Service/Support, Training, Contract Duration, Contract Volumne, Payment Terms and Resources, just to name a few. E.g what point does it have to find a birthday cake supplier who is a cheaper, if he can't deliver in time. The factors are interdependent, so altering one dimension in a proposal or request will most likely influence one or more other factors. One example is shipping of goods: if you want your stuff faster (Delivery Schedule), your price on the logistics component goes up. A customer who tightly manages the cash flow can be enabled to commit to a larger contract volume if the payment terms can be adjusted to their management practises. Visualising the specifics of a deal can help to gain clarity in preparation of negotiation sessions.
If the problem you will solve for the client is critical for their business then price might not be the primary driver anymore. Speedy delivery, capable implementers and fitness for purpose take centre stage. Only with clarity about the situation you can spot these opportunities. Eventually you need to educate your customer on the priority of the other parameters.
All charts have been drawn using the rGraph HTML library.
A variation of the multi-dimension chart is the old IT joke: "We can make your software fast, cheap, bug-free - pick any two".
As usual YMMV.
Posted by Stephan H Wissel on 26 April 2011 | Comments (0) | categories: Business