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Close Those Deals With Value Sharing
Written by: Steven ReevesArticle Overview: Most people are finding it just that bit harder to sell business services in today’s tough markets? Not because of competition - but because customers are holding off writing deals. What can we do to get them moving?
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Free Download - Close Those Deals With Value Sharing By Steven Reeves |
Close Those Deals With Value Sharing
Most people are finding it just that bit harder to sell business services in today’s tough markets?
Not because of competition - but because customers are holding off writing deals.
What can we do to get them moving?
In
our business we’re turning down offers from people, not because we
don’t need their stuff. Because we need our cash more! And our guess is
the majority of businesses feel the same way.
Cash is King. Money’s tight for everybody, and businesses are pessimistic about just when things are going to improve.
So is there a strategy that unlocks the customer’s check book?
We
think so. It’ll be a fundamental of business strategy in the future.
Maybe now is a good time to get our brains around the idea and start
structuring business models to fit.
And that strategy is? - “value sharing”!
“Value sharing” works both ways, on the upside as well as the downside.
It
works for the customer, because his/her risk is mitigated. If the
project doesn’t pay off the supplier has “skin” in the deal. Failure
means both parties share the pain.
It works for the vendor, because when the project pays off there’s a bonus related to the value created.
The
customer goes along with the idea when his primary motivation is
avoiding risk. The vendor goes along when the fee rates don’t properly
reward the contribution.
For some services providers selling
value sharing can be a bitter pill to swallow. After all they just want
their day rates. But what happens when the customer needs the service,
and will build value with it, but won’t sign on the dotted line?
Everybody loses, in this case.
Doing a value sharing deal
unlocks the check book, albeit maybe for a smaller fee, and opens the
opportunity for much bigger upside.
But there’s a much bigger win here.
Once
they’ve figured a way to value share the parties aren”t customer and
supplier anymore. They’re partners, with a common interest in making it
work. And the further upside for the services provider is the customer
won’t even think about working with anybody else on the next deal.
“Value sharing” unlocks deals, increases revenue and margins, and locks in customers.
Finally,
don’t take my word for this - go look at the success of the Business
Process Outsourcing industry. Those guys figured out, a long time ago,
that mitigating the customer’s risk enabled higher rewards for the
supplier.
Article Tags: bitter pill, bonus, brains, business models, business services, business strategy, cash is king, downside, failure, good time, guess, king money, motivation, project doesn, risk, rsquo, services providers, sign on the dotted line
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About the Author: Steven Reeves RSS for Steven's articles - Visit Steven's website Boomer turned Zoomer - thirty year sales professional with experience selling everything from debt collection to outsourcing and milking machines to mainframes. We have a house by the first tee at Royal Dornoch Golf Club and for two years in semi retirement I caddied on the course, much to the intrigue of visitors. For five years I worked hard at learning to play the saxophone and look forward to going back to playing every day. For the last two years Front Office Box, our service harnessing the Internet for small businesses has dominated every waking hour. FOB is the implementation of two philosophies combined. Our technology guru, Gareth Reeves, is an expert in Agile Development, Xtreme Programming and dynamic languages. His core philosophy is software should be an expendable tool which changes as circumstances do. Development costs are falling, and will continue to approach zero. We believe it's possible to create real value with software, by building in best practice and removing complexity. Together our ethos is software should just "do" and stay out of the way. Click here to visit Steven's website Improving the Bottom Line With Qualification Explain Your Process Close Those Deals With Value Sharing |
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