The power of reframing costs in a B2B context

πŸ’Ž The power of reframing costs in a B2B context

In the same way, in the early stages of a food delivery brand (now worth over Β£1bn), the proposal was to pay the restaurant directly for each meal it supplied and then to invoice them monthly for the commission on the month’s past sales. A marketing thinker pointed out that this was a mistake. “We should keep the money from each meal sold, deduct commission, and then send them a payment every month”. He or she understood that, if the restaurant saw the new business as a source of incremental revenue they would value it; if they saw it primarily as a cost, they would look for ways to avoid it. Again, in economic terms, there is no difference between the first proposal and the second, but the psychological effect on the business will be dramatically different.

Excerpt from: The Objectivity Trap by Rory Sutherland

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