The point of selling anything is to turn a profit. People often think of this as the actual monetary compensation you receive as result of providing a good or a service to your client. However, sometimes this isn’t all there is. This month, I have been working on a deal with the popular Christian and conservative satirical news site, The Babylon Bee. They hosted a huge gala for all of their biggest donors in Ft. Worth, Texas and wanted custom printed Bee cake pops for their VIP guests. I started working this deal back in September of 2022 and the deal was not finalized until early February of 2023– a lot of back and forth on the email! Anyway, one of the things that made the deal take as long as it did, was negotiations on how we would be compensated for these cake pops. However, what was unique about this the negotiations were not monetary. The deal we ended up with consisted of a special half-off pricing in exchange for a sponsored email message featuring our cake pops endorsing our next set of holiday-themed cake pops. This email goes out to almost two million recipients. I actually did not make the final decision– my boss did. When she and I talked about the deal, she found it worth it to give the cake pops to The Babylon Bee at cost in order to have that brand association as well as the email endorsement and advertisement. What was the ROI? To be determined. Not sure if it was worth it or not, but we will once the ad runs later.
The point of the story is sometimes it is advantageous to give up some of your profit margins (or in this case ALL of your profit margins) for something that may lead to many more sales down the road. That is essentially the gamble we took here! There is more than money that goes around in sales.
BoweryJE22
This is a very interesting negotiation. As you mentioned, not many people expect these styles of compensation deals, including me, but it is definitely important to keep these kinds of methods in mind. Especially as a new or smaller business, these kinds of compensation can serve as a much bigger return for your hard work. This goes hand in hand with necessary risks that new business owners need to take in order to grow their business and build the brand through awareness. I commend your boss for being comfortable and confident to make this deal, and I hope that it returns the investment much more than expected!
That is a great point! While profit is certainly a primary objective in sales, there are also other factors that can influence the decision-making process, such as branding, marketing, and customer relationships. In this case, the cake pop business saw the potential benefits of aligning their brand with The Babylon Bee and leveraging their extensive email list, even if it meant sacrificing some short-term profit. This is a strategic decision that requires weighing the potential long-term benefits against the immediate costs. It’s important for businesses to think beyond just monetary compensation and consider the overall value of a deal or partnership.