I think I would turn off an entire group of readers if I wrote that cost wasn’t important. Cost is the way we establish value for things. Cost helps up benchmark and prioritize projects within the business world. Cost is very important, but today I am going to use a real life example to help answer the question, is cost the most important thing?
Once upon a time…
I was working with a smaller size company a few years ago. When the sales representative initially engaged me to help explain AP Automation, I was very happy to find on the other line of the phone a company that was very serious about automation. As you can imagine, the majority of conversations I have are with people who are sorting out if Accounts Payable Automation is right for them or not. Don’t get me wrong, I like those conversations too, but it’s just nice to interact with someone who knows the value, or who I thought knew the value (insert duh-duh-duh music here). A few minutes into the conversation, the prospective client halted the product and service discovery and jump directly to price negotiation. I bowed out and let the rep take over. Then the prospective client started explaining, almost bragging, how they always get a discount in every deal they do. They took pride is getting the best price… better than anyone. I could tell the sales rep will settling in for a continuous ride. After weeks, almost six weeks of pricing negotiations, the client and company agreed to financial terms. The client was happy and the sales rep was battered and bruised.
The rest of the story…
(I loved Paul Harvey) I followed up with the rep on this client to see how the implementation was going, and the rep told me something that, well, shocked me. He said that the implementation had stalled, which is something that never happens with this company and the client was trying to get out of the agreement. Turns out that once the client got into implementation they had no idea what they had purchased (at a good rate) and they had no real goals on what success looked like. Although the rep didn’t, I blamed myself a lot of that. Looking back I should not have let the company go into pricing negotiation so quickly without understanding the values or at least having some back of the envelope goals to guide them. It was a disaster all they way around.
The rep was trained that when a prospective clients wants to buy… sell it to them. That’s pretty easy to understand, and quite natural. However, as a consumer you have to protect yourself and not only know what you are buying but know the impact that it will have on your organization. Buyer beware is something I was taught at a very early age, and it’s still good advice. So is cost the most important thing… no, the offering and the impact is… then cost.
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