44red has clients in many industries and in all cases has secured
44red has clients in many industries and in all cases has secured sustainable business relationships by always providing clients with multiple options.
In all walks of commercial life, one of the biggest and most prevalent mistakes on the vendor side of the equation is presenting only one option to the potential buyer. There is no other way of saying this than the practise of presenting only one option is both lazy and almost certainly destined to lead to a price haggle.
If a vendor only presents one option then the behavioural economics behind this is that the buyer will then compare and contrast that offer with those of competitors. The buyer can then leverage the competitive offers against the vendor to drive price down and/or gain more favourable terms and conditions – either from the vendor or from the competitive parties. From the vendor’s perspective this leads to incredible frustration, not least of all with the individual buyer involved because in many cases, the vendor has spent months, sometimes years, developing a professional relationship. In B2B negotiation though there are no friends, there are only interests so blaming the buyer is fruitless.
Conversely, if a vendor presents three options (but no more) – a low cost, a mid-range and high-end solution – the whole psychology changes whereby the compare and contrast exercise undertaken by the buyer is between which of those three offers is optimal.
The buyer invariably respects the depth of thought and due diligence that the vendor has undertaken to explore a range of options, it gives both sides multiple opportunities to mix and match elements and most often the buyer selects either the middle case or high-end option. The end result is that the client gains a better more rounded solution and the vendor serves both his/her substantive and relationship needs.
Finally, from a vendor’s perspective, it’s intellectually so much more rewarding creating multiple options because sometimes three different options are not that obvious. When you start to un-bundle and/or add issues though, it becomes very apparent that there are always numerous viable solutions.
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