What the heck does that title mean? It is a concept called net present value,
and it is a time value of money concept taught in business school and
relates to making investments. At some risk of simplifying things too
much, if a project has an NPV less than zero, it means that
expenditures will exceed income. In other words, don't take the
project. On the other hand, projects (or customers) that have an NPV
greater than zero, well these will add to the enterprise value of a
firm.
So the other day I had a customer prospect say to me numerous times
that we weren't going to get much money from him based on his simple
requirements. It wasn't a negotiating tactic by the customer prospect.
His requirements were pretty straightforward and fit into our
affordable pricing plan
(I mean people sometimes don't realize that
they can get like 100 ad-free and customizable blogs for $19.90/month
... that's $0.20 per month per blog). No complicated pricing plan or
upsell needed. The person was legitimately concerned about my
investment in the pre-sales process - perhaps I was spending too much
of my time (which costs my employer money) gathering info for him.
So why do I spend so much time with working with customers that use our products, but where we may not even make any money?
The answer is this. Blogging a growing "industry". I'm a new kid on the block for 21Publish. I hone in on honest and talkative users of
the 21Publish product. I need to get product feedback from them. I need
to experience what they are experiencing. I need to know what they
want. How they perceive the product. How they value the product. Where
improvements can be made. While we (21Publish) can't accommodate every
request for enhancements, we're working at it. It's my role as an
employee of the company to really understand the product at an intimate
level. At some level, all of the users of a product (regardless if you
are bean counting the lifetime value of a customer) can become
advocates for a company if the company earns their trust.
The University Chicago may revoke my MBA with such sacrilegious talk about accepting NPV <= 0 projects ...
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