“You are in front of the customer. This is a big deal. You have been told by your management that you will lose your job if you lose the deal. Also you will lose your job if you agree to an un-approved discount on the price. You are in a meeting with the customer and your competitor is waiting outside. The customer says that he is going to decide only on price and that the competitor is going to give a discount he is looking for and he is going to make a decision immediately. He asks you to make a decision on the discount immediately. And BTW, you can’t call your management on the cell phone or use the customer phone to call your boss”. I did pass the test and got the job…
The answer to the sales test.
A few assumptions.
- I am going to assume that my competitor cannot offer un-approved discounts either to make the game fair.
- Another assumption is that I am purely selling a commodity and the customer cares only about price.
- I have had some sales people say that they will offer something which is an intangible extra which cannot be measured and so are having and developing personal relationships whatever that means.
- I am also assuming that the customer can delay the decision.
- The customer is going to make the decisions purely on price.
You would make a good “agent” for the “principal” by finding that discount percentage in a careful manner by calibrating it down slowly instead of doing it steeply. You can then get some kind of commitment that the customer will cease negotiations and make the deal happen and not play a “Race to the Bottom”.
I did get the job…
As I go back in time in the Spring of 92, the answer was more by instinct, intuition and gut feel than an analysis as described above and Nash was on the verge of receiving the Nobel Prize.