Getting Paid to Play

When a prospective customer calls expressing her dissatisfaction with her current vendor the immediate tendency is to bid aggressively for the business. You suspect that you are being used by the customer to get a better deal from the current vendor, but you know that if you don’t bid there is no way of getting the business. As expected the customer thanks you for your bid but does not get back. What might you have done differently?

You could have bid lower but that is not the real solution. The problem with the strategy was that you were willing to offer competition for free. You should have instead asked yourself: how important is it to the customer that you bid? If your bidding is important then you should get compensated for playing the game. If it’s not important then you are unlikely to get the business and even less likely to get paid, so you might want to reconsider bidding at all.

Five Ways of Getting Paid

  1. Ask for contributions toward bidding expenses, up-front capital costs etc.
  2. Ask for a last-look provision, i.e. the option to match the best price in the market
  3. Ask for better access to information
  4. Ask to bid on other pieces of the business
  5. Ask the customer to quote a price at which he would give you the business

Of course, cash is OK too!

Recognizing such opportunities that present themselves in our roles as suppliers, competitors, customers, and complementors and knowing how to get paid for what we bring to the table are an important aspect of business success.

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