Questions

We have face based attendance solution. The pricing is user based licenses. The B2B customer has to buy as many user licenses as the number of employees who will enroll themselves for daily attendance. The total deal is of $20000 for 1 year. We have to provision the system, provide support etc and hence we ask for 50% advance payment. The remaining is paid on a monthly basis. The CIO wants to understand why the advance payment is required even before we start. Seeking clarity to understand from the community that what are the convincing reasons to ask for advance payment from a B2B customer for any cloud based offerings?

If this creates any friction during my sales, I start by explaining that they are paying for services not products. Like all services, once reserved or provided, I have no way of recovering costs if the client has any issues with payment. It might not have be nefarious non-payment, or anything to do with satisfaction, it could simply be cash flow or adoption issues the client experiences. So much like booking a seat on an airplane, I need to be able recover costs unrelated to the customers ability or desire to pay.

So by focusing on the idea that they are reserving services and capacity, it aligns my offerings with comparable services that have established similar payment arrangements. I find this common sense comparable usually does the trick to allay any concerns. If it doesn't, it alerts me that this client might not become problematic in other ways and I should exercise care.

As a trained negotiator, I can provide more approaches and techniques for proactively removing this type of friction from your offerings and sale fulfillment process. Schedule a call if you'd like more in-depth discussion.


Answered 4 years ago

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