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Using "Safety Nets" To Sell More Education Agreements.

Everywhere you look, clever training companies are trying to rope customers into binding, long-term agreements that commit them to high purchase volumes, no matter what.

Meanwhile, customers are going to Houdini-like lengths to enjoy all of the discounts and benefits inherent in high volume agreements -- while wiggling out of any sort of performance commitments.

Here's a way out.

Take the same rope you were hoping to hog-tie your customer with, and use it to weave a safety net. Build in a post sale option to rescale the agreement in a fair and preordained way once the need for training is better known. Provide plenty of "wiggle room" for substitutions across your curriculum and delivery options. Give your customer the option of backing out of the agreement entirely providing they pay you fairly for any training they have consumed.

Whoa, whose side am I on, anyway?! Well, let's consider the advantages of the safety net approach.

  1. By building wiggle room and escape clauses into your agreements you greatly reduce up front sales resistance. Who can build a consultative selling relationship when you're perceived as an adversary.

  2. By moving the need for a detailed training planning analysis until after the sale, the sales process is greatly accelerated. Also, it's much easier to accurately determine the nature and scope of training needs once the customer relationship is underway.

  3. Also, a post sale training analysis and planning effort minimizes the likelihood your original proposal will be shopped -- or that you will squander scarce consulting resources on a deal that never goes down.

  4. Customers are a lot more likely to stretch if they know they are not going to suffer any serious consequences if they in good faith overestimate their need. Otherwise, they'll just commit to enough to last them to the end of the quarter -- and you'll have to start negotiating all over again.

  5. Why build punishing performance clauses into your customer agreements, if you're not prepared to enforce them, anyway? I see too many situations where sales and customer relations personnel are consumed with resolving deals that have gone sour, while the tough-talking higher ups who wrote the contract language look the other way.

  6. Finally, how do you renew a volume purchase agreement where you won and your customer lost? That's one sales call I'd rather not go on!

OK, so much for all of this safety net stuff. But suppose your customers actually take advantage of your good graces -- what then?

Well, if you structure your safety net correctly, there's a fair give and take if your original agreement needs to be revisited -- so everybody wins. Furthermore, you'd be surprised how infrequently customers actually exercise their option.

Some time ago we structured a volume purchase program with an extremely generous bail out clause -- which earned us a loud "you'll be sorry" chorus from the usual evaluator-critic crowd. Surprisingly, out of more than 600 agreements sold, not one customer chose to accept their exit privileges!

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