The Art of Value: Quid-Pro-Quo

 
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You're probably using quid-pro-quo wrong. In fact, most people are using it wrong so don't be upset.

There are two types of quid-pro-quo—value destroying and value creating. Value destroying is what we most commonly see. They are usually one-sided—even if you don't realize it. Let's take a few minutes to discuss. Value creating, on the other hand, creates significant value for your customer and for you.

Value Destroying

Getting a contract signed by a certain date in exchange for a discount is a one-sided, value destroying quid-pro-quo. Why? Because you provided a discount on your service in exchange for—if you did your job right—a contract that would've been signed anyways. You really didn't get anything out of deal—in fact you got less. This type of quid-pro-quo is probably the most common and used by nearly everyone at some point. Start to take some time to evaluate if you are destroying value and stop immediately.

Value Creating

Let's get to the good stuff and talk about how you can create more value for both you and your customer's. In value creating quid-pro-quo, it's okay to reasonably discount because, if done right, the value you create will far exceed it. Let's talk done examples.

Consider this: Your business is launching a new service and you have a customer who is interested but there's minimal support to help them make a decision. You tell them you'd be willing to discount 10% if they agree to a few things. First, signed by a certain date. Second, they agree to working with your team on a case study that will help others like them have the supporting information they need in the future.

In this example, you still got the value destroying quid-pro-quo, but you also created an opportunity of tremendous value. What is a 10% discount worth of it drives three more new deals. I'd argue a hell of a lot!

You might ask, “but how did you create value for the customer?” For one, they received the discount they wanted. Secondly, how much more likely do you believe they are to succeed with greater involvement from your team? You will be more embedded and more focused on ensuring things go right. That's worth quite a bit to a customer.

True Quid-Pro-Quo’s Build Value

There are a few more examples of value creation. It could be simply asking the customer to act as a reference. Maybe you can agree to a longer-term contract for a higher support tier. What about a full time and savings analysis that you use to build an ROI or CBA? These are all great examples. But remember, if you are going to use these types of examples, you need to be critically focused on your customer's success—and that's a great thing for everyone!

What are some examples of good and bad QPQ that you've used in the past?

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Josh Kondik