Subject: Re: street performer protocol
From: Frank Hecker <frank@collab.net>
Date: Sat, 13 May 2000 16:06:17 -0400

"Jonathan S. Shapiro" wrote:
> > What about the customer who is generally as informed about software
> > development costs are you are?  How do you convince him he's getting a
> > good deal?
> 
> That's easy. You point out that it would take them X dollars to write the
> software themselves, that this would take Y developers who are hard to hire
> in the current market, that it would take Z months (where Z is always longer
> than you will take because of hiring and startup and familiarization delays)
> to build, and that during those Z months all of the things that depend on
> the software are delayed.
> 
> That is, you emphasize the time value of money. The real price is the
> *higher* of (a) the value of the software to the customer, and (b) the cost
> to the customer of not having it.

Right, which is why in selling it's important to look for customers who
have problems that are more immediate and pressing, as opposed to
problems that are less so. If it's not a problem that's worth solving
right now then it's not a problem that you can command higher margins
for solving.

Another sales truism is that, things being equal, customers are
typically more motivated to make a decision that avoids potential losses
than brings them potential gains, in other words "fear trumps greed". (I
believe this is actually a fairly well researched topic in behavioral
economics, but I'm not familar enough with the field to discuss it in
depth.)

Frank 
-- 
Frank Hecker            work: http://www.collab.net/
frank@collab.net        home: http://www.hecker.org/