Situation: A company is negotiating an agreement to resell another company’s software. In due diligence the company encountered a customer who was offered a single user license for the same software at one-third the price that they have been asked to pay upfront. What is the best way to approach the vendor for additional information without divulging the source of his intelligence? Does this change the negotiation?
Advice from the CEOs:
There is no need to divulge your information source. Just say that you have done some research and quote the price that you found. Ask them to explain this to you. See how they respond. This may tell you a lot about how they operate.
What rights do you receive under the arrangement that has been offered by the firm? What exclusivity and guarantees will they offer? Will they write these into the agreement? How will they handle direct inquiries?
Perform a careful financial analysis of the opportunity. Model the market and the full cost of sales that you will encounter. What is customer purchase behavior? Is it changing?
Counter the vendor’s offer to you with a pay-down option that pays the vendor more over time, but allows you access to the software without a substantial up-front payment. This limits your exposure if sales do not ramp as you anticipate.
Visit the vendor and sit down with the President. See how this individual responds to your questions. You may get a much better deal through this approach than through the sales team. You also may develop other partnership options that can benefit you long-term.
Key Words: Reseller, Agreement, Price, Software, Due Diligence, Negotiation, Research, Exclusivity, Guarantees, Direct Inquiry, Analysis, Customer, Behavior, Counter, Visit
Situation: In traditional marketing, many marketers are more focused on activity than results. In the digital environment, top marketing organizations must become better at listening to their customers, watching them, and tracking their purchase decision behavior. What does this mean for the marketer?
The digital world has changed marketing.
The traditional marketing campaign was led by creative. Through the early 90’s marketing was directed by media players and large publishers. Once a campaign was developed the pitch was “buy lots of impressions and customers will come.”
During the dot.com boom and into the 2000s there was a shift to ROI – spend $x with Google, get y clicks that will yield z buying customers. This was very transactional and could be expressed relatively simply.
Behavior is now changing, and the model is becoming more collaborative:
A potential customer expresses interest and a need.
A supplier offers a solution.
The potential customer verifies and validates the offer through online communities, Twitter, Facebook or other resources, and eventually may make a buying decision based on what they find along the way.
The buying decision today is very different from the traditional offer-driven process.
All of this can happen in minutes.
For the marketer, this means moving far beyond the simple advertisement.
The marketer needs a presence on Facebook, Twitter, and many more sites, in addition to their website, to woo potential customers.
For marketers this is expensive and requires a different level of resource commitment. It is, therefore, important for them to attribute the appropriate value to each online presence that the customer engages as they evaluate their buying choices.
Only through developing complex metrics, which change real time as customer behavior changes, can the marketer track and understand customer behavior and adapt the offer to the needs of the customer.
As individual consumers increasingly engage employ new forms of digital technology the challenge to marketers only increases.
The digital marketer who will thrive will develop a sophisticated, metric-driven understanding of the multiple touchpoints and social interaction of a given transaction.
Situation: The Company is shifting focus from project-based to relationship-based client interactions –from a short to a long-term perspective. This is a challenge. How do you adapt employee behavior to a new strategic focus?
Assume the best intentions.
Everyone wants to do a good job. The challenge is making sure everyone knows what constitutes a good job.
Be clear on objectives, and why they are important. Be clear on the new roles.
This is most difficult when the shift is counter to a well-established company culture.
You have to have the right people.
Avoid smart people with no role, or a role for which they are ill-suited.
The organization IS the people. There must be absolute commitment to assigning the right talent on any job, and the right people to the right team.
Players must fit in terms of skill set and culture. The company is who, not what!
Focus efforts and objectives on the long-term vs. the short-term.
Paint the end state – the vision. Add tangible steps to guide people to the right path.
Don’t micromanage. Set direction and initial moves, but let staff blaze the path.
Provide feedback and recognition.
Negative feedback is always difficult, but best when delivered directly and quickly.
Recognize success and contributions both 1-on-1 and in all-hands meetings.
We hired an experienced manager with a strong track record. Initially this created discomfort; however discomfort was quickly resolved as this person produced positive impact.
We cited the wins in all-hands meetings to support the shift.
Make people feel that their opinions are heard, and their solutions.
Be clear on objectives and rationale. Assure that your perspective as leader is grounded in a credible reality that you can communicate to the team.
Conduct workshops which focus on the practical steps that will produce the desired result.
Listen to feedback from team members, and include what you hear in the agenda for future discussions. Involve the team in developing the solution. Delegate and recognize!