New Business Development
/Do your negotiations with potential clients look like this?
Guy: Hello. I’d like to buy a widget from you guys.
Me: That’s great! Thanks for choosing us for your widget needs. Widgets cost $X.
Guy: Oh, well… That’s a bit more than what we planned to spend. Our research indicates that we can get widgets for 10% of $X.
Me: Here, let me e-mail you some information about widgets and once you’ve had a chance to take a look at the information, you’ll see why it costs $X.
Guy: Thanks. I’ll get back to you. One Month Later…
Guy: You’ve gotta help me. We bought a widget for 10% of $X from another company and it doesn’t work right.
Me: What seems to be the problem?
Guy: Well, it seems to work only in Japan when the relative humidity is 50% or less.
Me: That’s unfortunate. I wish you had bought your widget from us. Our widgets work worldwide. It was in that information I sent you.
Guy: Well, what if you sold me a widget for 5% of $X? That would get me off the hook and it would get you our widget business exclusively.
Me: I’m sorry, but if I sell widgets for less than 90% of $X, we lose money. And we lose time, too – time I could spend with my other clients who happily pay $X for widgets.
Guy: Aaaaargh!
Two Weeks Later…
Guy: How about if you gave us the widget for free, and we’ll give you a percentage of what we make using your widget?
Me: I’m sorry. I can’t take that kind of risk. We know our widgets work, but there’s simply too much we don’t have control over to be able to be 100% confident that you can make money using our widget. I mean, what if you have the wrong widget holder or you fail to properly maintain your widget? We can’t be responsible for that.
Guy: Well, I can’t afford to pay you full price for the widget, because I spent the budget on the widget we got for 10% of $X.
Me: I can come down on price to 90% of $X if you sign an exclusive deal with us, but I lose money if I sell widgets for less than 90% of $X.
Guy: You’re being inflexible! I can’t work like this!
Me: Then why do you keep calling me back?
Two Weeks Later…
Guy: Okay, we’ll give you 90% of $X for a widget.
Me: That’s great. I’ll draw up the paperwork.
Guy: Not so fast. We need to test your widget first. I’ll give you 9% of $X for 1/10th of a widget. And if it works, we’ll buy the rest of the widget.
Me: I’m sorry, but a fractional widget isn’t going to get the job done for you. We’ll be set up to fail. You won’t be happy, you won’t buy from us anymore and it will be a big waste of time and money for the both of us.
Guy: But how do I know whether or not your widgets work?
Me: In the information I sent you a while ago, there were plenty of case studies from other satisfied customers that attest to how well our widgets work.
Guy: Yeah, but no one else is using your widgets to build a barnacle removal business in Upper Volta and Transylvania. How do I know whether or not your widgets will perform in that capacity?
Me: Well, no one else is using the widgets to do specifically that, but there’s a case study in there from a boat refinishing business in Miami. They were very happy. Isn’t that close enough?
Guy: No. They don’t do business in Transylvania.
Me: I don’t think anyone who sells widgets right now will be able to provide you a case study specifically for barnacle removal in your particular markets. But all business is not without risk.
Guy: What if you paid for a market research study to predict how your widgets would do in Transylvania?
Me: Why should I pay for that? If you don’t do business with me, how would I recoup those costs? I don’t know anyone else who is running a barnacle removal business in Transylvania. The resale value of that research is practically nil.
Guy: Until you can do market research proving that your widgets have 100% success rates in Transylvania, I can’t do business with you.
Me: Okay, forget it then.
Guy: Aaaaaaaaargh!
One Week Later…
Guy: You’ve gotta help me! My boss is going to fire me unless I get this widget business straightened out!
Me: You know the prices. Can you pay $X yet? Or at least 90% of $X?
Guy: We had a budget cut! I can’t afford $X. Or 90% of $X. Heck, I can’t even afford $X minus $X!
Me: Sorry. We can’t give widgets away.
Guy: But if you don’t give me a widget, I’ll lose my job! How about this? If you give me a widget, we’ll let you share in the profits of the resale of stripped barnacles in Transylvania…
Me: I think I explained that we can’t do revenue-sharing agreements.
Guy: I’ll throw in a percentage of the profits in Upper Volta.
Me: No. I’m sorry.
Guy: Aaaaaaargh!
Me: Please don’t call back until you’re prepared to pay at least 90% of $X.
Three Days Later…
Guy: Okay, I’ll pay you 90 percent of $X. We had to fire three hard-working barnacle strippers to be able to afford your widgets. I hope you’re happy.
Me: I’m sorry your business isn’t doing so well. And it sucks to have to let people go. But I’m sure you’ll be happy with this widget and maybe it will help things turn around for you.
Guy: Do you have a contract?
Me: I just e-mailed it to you.
Guy: I’ll check it out and fax it back to you.
Two Hours Later…
Guy: I made some changes to the contract and signed off on it.
Me: Let’s see here… You inserted a clause that says we have to pay you six million dollars in Romanian lei if I walk my dog on a Tuesday morning. There’s also a clause in here about my need to maintain $50 million worth of insurance against vampire attacks in order to do business with you.
Guy: That’s just standard stuff. Don’t worry about it.
Me: I’m sort of fond of walking my dog on Tuesdays before work. And I don’t see how walking my dog has anything to do with the quality of the widgets I’m providing to you. Oh, and vampires aren’t real.
Guy: This is how they do things in Transylvania! I thought you had experience doing business with Transylvanian companies!
Me: No client has ever tried to tell me when I can and can’t walk my dog. And even though the risk of vampire attack is nonexistent, carrying $50 million worth of insurance isn’t exactly cheap.
Guy: Let me talk to legal.
Three Weeks Later…
Guy: Okay, I spoke to the legal department and we were able to get the dog-walking and vampire insurance clauses waived.
Me: That’s great! When can you sign off on the paperwork?
Guy: Right now. We just need to make a teensy adjustment to the payment schedule.
Me: What sort of adjustment?
Guy: We’ll pay you 20,000 lei net 90 and the balance in monthly installments of 10,000 lei.
Me: U.S. dollars only, please. And your payment plan would get us paid off in 2012, so I think we ought to look to accelerate those payments a bit.
Guy: You’re being inflexible! I’ll take my business to your competitors!
Me: You tried that already. It didn’t work, remember?
Guy: *click*
Three Weeks Later…
Guy: Hi, this is Guy. Remember when I was working for that Transylvanian barnacle removal company? Boy was that a dog… Anyway, I’m working for a ferret de-scenting operation in Yemen now. And we need widgets! How about 4% of $X?
Me: *click*
