Embracing “And” Instead of “Or” in a Standardized Pricing Discussion
Jim Collins devotes a small chapter in Built to Last to the idea of embracing “and” rather than “or.” (You can see the book summarized in Collins’ article “Building Companies to Last” here.) Collins refers to “the tyranny of OR,” defined as “the rational view that cannot easily accept paradox, that cannot live with two seemingly contradictory forces or ideas at the same time.” People tend to believe that things can be either A or B, but not both. In business, we might see this expressed in terms of growth OR profitability, stability OR change, low cost OR high quality. Most people think that they have to choose one at the expense of the other. What if you could have both at the same time? That’s the beauty of AND.
“The test of first rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.” — F. Scott Fitzgerald
I recently had the opportunity to apply the genius of AND to a situation at work.
For very good reasons, my company has priced its services according to regional market differences. What you buy in NJ will have a difference price than what you buy in Kansas even though they’re essentially the same service. A valuable and long-time distribution partner has now asked us for list pricing. Can you imagine the flurry of internal objections? Appointed to the role of “moderator,” and tasked with participating in the tough conversations at my company in order to come up with nationwide list pricing to present to the partner, I found myself thinking: Why can’t we have standardized list pricing AND regional pricing? We give the partner a list price that comes with a nice bulleted list of reasons that they may want to stray from list pricing, and we invite them to pick up the phone to call us if they think that any of those reasons apply to their customer in the sales situation. We all win.
I may be oversimplifying this situation (it will still be hard to agree upon that list price), but by thinking more broadly and by assuming that two concepts can be equally possible or equally true at any given time, we can create a scenario in which we all win. My company’s business model doesn’t have to change. Our distribution partner can have their list price. AND we can create new opportunities for dialogue around any given opportunity, which will most likely increase the likelihood of closing the sale AND strengthening our partnership with the distributor. What do you think? How can you start using AND more in your life in order to go for the win-win?