[BC] Sales practices

[Mike McCarthy]

This is a very dangerous practice to allow in any business.  In essence, 
you are financing the client's operation for 1/3 of a year.  That said, if 
you build in a 10-15% add-on to the market price and then accept those 
terms, it's a different story as you've already included that cost of doing 
business as a premium.  But if you allow market pricing and extended terms, 
you are digging a hole you will quickly find difficult to extract.

AB is the 800 lb gorilla in that regards and it's using that weight to get 
what they want...cash preservation.  Can you see the auto manufacturers, 
insurance companies, and other big buyers do this?  Media's hemoraging of 
cash will eventually bleed out and there won't be anyone left.  Which is 
maybe what they want.  Only a few players where they can garnish the whole 
audience and then dictate what they will pay.

I suspect we will see a departure of BUD and related brands from the 
airwaves soon as I don't think anyone in their right mind will go for 
this.  No wonder the top marketing people at Bud have left recently.  They 
wanted no part of this....and rightly so.  Their reputations were in a 
no-win situation.

MM

At 10:48 AM 2/18/2009 -0700, mark at shander.com wrote
>Hi Barry,
>
>Excellent topic.

SNIPPED

>If you're having an issue and you need to work something special out with
>a particular supplier and you're negotiating a specific deal, you can work
>through that.  Otherwise, it's very dangerous to accept this deal.  From a
>sales perspective, it has very far reaching implications for the industry
>as a whole.
>
>Regards,
>
>Mark Shander
>http://www.shander.com
>
> > There has been some "chat" about Anheiser-Busch's new "policy" of
> > paying in 120 (or more) days.
> >
> > Other advertisers are *taking* discounts after negotiating spot rates.
> >
> > I do recall turning down an owner who wanted to pay for emergency
> > engineering time "like the agencies do - 120 days."
> >
> > So, let me ask those of you in sales: is this Anheiser-Busch deal
> > new, or is it business as usual?
> >
> > And ... how do you/(can you) deal with it?
> >
> > thanks