Time’s lethal effect on closing a business deal is conventional wisdom. It’s truer in some industries than others. But in nearly all cases, the longer it takes to close a deal, the more that gets negotiated away.
Time gives the buyer (whether of a new house, an engineering contract or a new television) more time to re-think the wisdom of the purchase.
The current recessionary economy has people taking much longer to make consumer and B2B purchasing decisions. This slows cash flow and often creates a downward pressure on price.
In a brisk economy, time is more valuable than money. In a slow economy, the opposite is true.
Is there any way to beat this principle? Or is there some way to leverage it?
Beating the Time-Kills-Deals Effect
Time can be an ally in relationship building. Just as parents found out a decade or two ago that “quality time” with kids is no replacement for “quantity time,” so can business make use of the additional quantity of time between pitch and purchase.
This longer courtship can be used to share more ideas, collaborate on solutions, maybe even break purchases or contracts into smaller, more economically digestible bites while still arriving at the same destination. It puts a bit more “give-to-get” pressure on the seller, but it may be worth the risk.
Leveraging the Time-Kills-Deals Effect
Example: Taiwanese netbook computer-makers have realized huge profits by creating a computing device that does 90 percent or more of the tasks for which most people use their larger, more expensive laptop computers. As shoppers slow down and rethink their actual computing habits, they realize that a computer can access nearly every program imaginable remotely: email and web browsers, of course, but also office document production and photo retouching can be accessed for free without buying any boxed software. The time that consumers are taking to rethink computing is creating a huge market for a smaller, lighter netbook computer that costs a fraction of a power-hungry, feature-laden laptop.
So as the time-money continuum bends in favor of buyers over sellers, opportunities are ripe for harvesting by creative, generous companies ready to shape-shift to new economic realities. Small and midsize businesses will be more successful at this than big corporations, as smaller companies are more nimble.
And besides, they won’t be getting a big stimulus check from the government any time soon.