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Element 7. Compelling Pricing Possible > Practical Experience—This Deserves the...

Practical Experience—This Deserves the Minimum Weight of 1

Your early customers will likely demand low prices because they are uncertain whether your products will be delivered, whether they will be supported, and whether they will be reliable. Some might request stock warrants because they would be taking a chance on you and they realize they have you “over a barrel.” So it is difficult to say no to these up-front demands.[3] The key is, can you afford it? In any event you should mount a spirited defense of your pricing and its margins. Bottom line? Never ever turn away your first customer. Take the deal at whatever cost and run to the market with the news: you are in business!

[3] Actually, you might be able to use the leverage of being able to call your biggest customer an “owner.” Waring Partridge of AT&T Strategic Planning fame once used this ploy as a matter of practice, delivering occasional bonanzas to AT&T while rewarding the new vendors with the ability to say “. . . we are owned in part by AT&T.” Over the years, Waring contributed far more to AT&T than his compensation cost them, just by being clever and asking for a few shares to sweeten the deals with new vendors. AT&T was these vendors’ first customer.


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