What is a ‘Bad Deal’?

The Guy in red with the tail and horns is marked A, and the plastic Guy with a briefcase is B . This saves me chundering on about a red guy with horns and a plastic with a briefcase.

Most deals will benefit one party more than the other . There are few ‘win, wins’. In my experience there are a varying degrees of ‘goodness and badness’ in every deal.

I suspect that most seeing the image above will assume that A is getting the better of the deal, and the B guy is getting a really bad deal. Well if B is a major drug syndicate boss , then they might think they both have a really good deal . Assuming A doesn’t have a problem with drug dealing (stop there , never judge a book….)

In business , I think there are three types of deal.

1. Where both sides of a negotiation are already in a commercial relationship.

2. Where one party is seeking to start doing business with a new partner.

3. One off purchase.

There are, undoubtedly, many variations but broadly speaking all three categories cover the majority of commercial ‘deals’.

Despite having been doing it for a long time I can’t say I have cracked this deal business. I would go further and say I am probably pretty rubbish at it. But I won’t say that in case there are some potential customers who may , by default, come across this post. I can recount one incident, where the negotiations were all one sided, in that the customer (type 1 in this case) did no negotiating whatsoever or so I thought.

Myself and a colleague spent half an hour in front of said type 1 , presenting product and prices . He said absolutely nothing, until the end. When he simply said ‘pick up your order from the printer in the next room‘.That man is now one of the U.K’s most successful retailers and is listed in the Sunday Times Rich List. The closest I get it to it , is reading it.

In most cases type 1 deals are not really deals or rather you can rarely classify whether they are good or bad, which in my book means they aren’t actually deals . Let me explain.

You can have a meeting with a customer, with which you come away with an order, contract or promise to buy blah, blah,blah. You feel fairly satisfied or in rare cases ‘very’ satisfied in that the margins are acceptable, the quantities are good , terms are fair and more blah, blah. Yet over a period of time there are loads of things that can impact upon what you thought was a deal.

  • They don’t buy anything like what they said they would
  • After a period (could be a lengthy period) and say thank you very much but we would like some historical financial contribution to help with something like help with marketing
  • They don’t pay to terms
  • They go bust
  • They use the sales data to go and do their own thing

The list is endless (truly endless) . The point I am trying to make is that you never really sure what the ‘Deal’ ever is.

Type 2 is the same but different.

Generally, involves a protracted courting of the potential ‘client’ prior to any negotiations. Followed by lengthy discussions involving terms of trade, finally culminating in an agreement allowing trading to start. You don’t actually ever have a deal as generally it is a dynamic process. The culmination of this process may allow you to look back and say ‘that was a successful relationship ‘ but I would be hard put to describe it as a deal, for the all the reasons described in type 1.

Type 3

I can lay claim to a recent, nay solitary, success here. I wanted to be buy a replacement base layer (something you wear for the ‘non rugged’ outdoor type ). Eventually I found what I wanted, but at a price I was not happy with. I would love to say I then spent three hours haggling until finally, due to my extraordinary talents in negotiating skills, I got it at the price I wanted. But I can’t . The ticket price was £35. The guy took it to the till and removed the security tag.

Shit …..he made a tiny hole in the neck.

We will go to plan A

He tapped into the till resulting in

I can do it for £10.50

Deal ….I replied

So there you are that’s what a good deal is….unless , of course, it falls apart because of the hole or I get a permanent stiff neck from the draught. Then it would be a ‘bad deal’. I am going to have to wait to find out.

So what I’m driving at is that there is lot a chat about good or bad deals. Whether, of heads of state, politicians in general, leading industrialists, even clergy, and a load geezers in pubs, they all bang on about them. But they don’t really exist . Rather they don’t exact in a pure form . The Oxford English Dictionary defines a deal as

An agreement entered into by two or more parties for their mutual benefit, especially in a business or political context

Note the mutual benefit bit. That’s the problem . It’s not possible to walk away from a negotiation assuming there will be mutual benefits. A Deal is a process and it is not until the end of the process , that you find out if it was good or bad . Then, both parties will have their own opinions as to when that process ends.

Here’s another problem. I never know whether I am talking to A or B . The snivelling ‘gits’ never dress in red and always cover up the pointy bits on their heads. Should I be ‘bovered’? Nah…’cos you just don’t know whose got the best deal. Or at least that’s the impression I get from some my customers…..

Can you have too much data?

Yes. I think so ?

For those who remember the days of telephones and telephone directories(especially if you lived within Greater London) that filled an entire bookshelf. Here was a mass of data, which you probably accessed , and I am grossly over estimating, a fraction of one per cent of the data available,during any one year. Moreover that information was out of date the day the directory was printed.

Well jump forward a generation and just take a peak of the following stats….

Everyday …..

294 billion emails are sent

65 billion WhatsApp messages are sent

3.5 billion online searches are made

90% of the last 5000 years of humanity’s data has been created within the last twenty four months. Are we benefiting from it ? At this very moment in time , I would err on the side of No.

Having said all this, businesses grow, develop and prosper by accessing and analysing as much information as possible ……”information is power”. Yet there is a ‘but’. It is the efficient and effective analysis that makes it of any use. Too much data creates confusion, inefficiencies and above all can lead to poor or just downright ‘wrong’ decision making. But we still have to make those decisions and I feel that many organisations, ironically especially the larger, misinterpret data, quite simply because there is too much. I, also, suggest that this is one of the current problems of our supermarkets . They have had a cumulative mass of data over many years and failed to properly decipher their customers psychology and behaviour. Other leaner, newer and sharper players have made better use of their information consequently have a much better understanding of the shopper and their behaviour.

Every day decisions become increasingly complex by the quantity of data available in making those decisions. A visit to any coffee shop is a perfect illustration…what milk would you like?semi-skimmed, full fat , lactose free, goats milk, vegan milk ……? Ok , thanks and which blend….there are twenty seven if you would like a quick look at our blend menu, which is on the other side of our syrup flavouring menu….

Fake news, albeit much clichéd, has been around a long time . In years gone by, there have been many occasions when all aspects of the ‘then’ media exaggerated or used bogus or ill researched facts to back their stories. But today there is so much access to data you would think it easier to verify fake news, yet the opposite is true. When questioning one piece of information there are so many potential sources that if we were honest with ourselves we don’t know whether the source we feel is the ‘most genuine ‘ is indeed genuine or fake.

Yet things ain’t going to change. Or rather they are, in so much as the amount of data will increase exponentially.

The following 2 images are taken from a report by PWC (Price Waterhouse & Coopers)

So what about us ‘littl’uns’. No one gets away with this. Supplier, independent retail, online, and even Jo Public. We have to develop our own coping and analytical methods. It’s as simple as suppliers working out that just because they sell a hell’uve lot of an item that it is a bestseller. It is the retailer making use the most efficient use of their epos systems, looking at social media and being aware of what is really happening out there. It is the consumer understanding what is a deal and what is not. Being aware of ‘influencers’, is the product they are being offered on a web site, what they think it is and do they really know where it is coming from.

Very recently a retired member of the Bank of England Board, was caught by a telephone scam. Although, retired he believed he was pretty clued up on all manner of scams. Yet, the information being given by the scammers seemed genuine. But it wasn’t and he got fleeced straight from his bank account.

Our mobile phones are said to hold more data than early spacecraft. Yet they were able to talk to earth from outer space. Sometimes, I can’t use my phone at the back of my house. In 2014 when NASA launched their Mars probe it had less computer power than your mobile. ‘Why is that?‘You may ask. Answer is quite straightforward. They planned for reliability over performance. Probably says all you need to know.