Abacus Transaction Cost Shifts

Bloomberg News introduced me to the latest in a long-line of recently uncovered shady financial practices. It involves hiding the true state of losses by misleadingly moving around debt positions; their scrolling headline text  “Abacus transactions allowed Goldman Sachs to shuffle debt risk like beads“.

Whilst such a policy rightly induces feelings of vitriolic bile among non-bankers, I realised a more acceptable use of this thinking is often tangentially applied by successful solution sales people.

They use a cousin of this “abacus” approach. From the respectable side of the family, it adapts price books and moulds investment presentations around their potential clients’ authorisation thresholds and budgetary constraints.

I remember when I first discovered I could ‘rip-up’ a price book. It was one of those eye-opening moments which give you a quantum leap in your capabilities.

Why restrict your potential for success or margin, when you can increase the price of those elements of your solution that are perceived to be most in need? If you’ve an offering that is truly unique, then why not bump up its price to help demonstrate the fact? More generic product can if necessary be reduced in such circumstance, so long as the overall profitability of the deal remains in the good zone.

Not only does this approach enable a skilled seller to craft a beautifully bespoke deal, it also allows you to ram home where and why your offer is more closely suited to your buyer.

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