The Boardroom, 2 Years Earlier

Margaret Peake sighs, shakes her head, and says, “You need to be flexible with your pricing, Mr. Ritchie. You’re not even in contention.” Discussions continue over pricing. Carl Ritchie defends his offer and then proposes an 8% discount, but the buyer wants 15%. Ritchie explains that he will be able to go no further than 12%. Margaret Peake accepts this. Yet just when Carl Ritchie is hoping to complete the purchase order, his counterpart intervenes again: “You see, Mr. Ritchie, the problem mainly concerns your payment terms. You’re offering us 30 days from invoicing, whereas our standard purchasing terms are 30 days end of month 10th of following month. So if you won’t accept those terms, I’m afraid we might not be able to do business.”

Discussions continue over payment terms. Carl Ritchie defends his firm’s commercial policy robustly. Yet he feels that if he does not back down, all his work will go to waste. He agrees to 30 days end of month. “I’ve saved 10 days,” he thinks to himself. Now Carl Ritchie is more relaxed. The deal is now within his grasp.

But the buyer leans over to him: “Finally, there’s something that I wanted to discuss with you—but I’m sure it won’t be any problem for you. I noticed from your tender that you intended to invoice us for the installation of the equipment. Yet most of your competitors agree to cover those costs, particularly for an order as large as mine. Was that your intention, too?” Carl Ritchie sighs and closes his eyes for a moment. “I mustn’t give her an excuse to scupper the sale now,” he thinks. So, in response, he mumbles, “Yes, if you like.”

He is just about to suggest that they sign the contract, when Margaret Peake asks innocently, “Of course, your offer comes with a free supply of consumables for the first 6 months, doesn’t it?”

Carl Ritchie is taken aback and starts to feel hot under the collar. “Absolutely not! And as you are fully aware, the consumables are the subject of a separate tender that you have already received.”

The buyer hunches back in her chair and shrugs helplessly. “Oh, Mr. Ritchie, that’s exactly as I feared, but I’m sure that you’ll be able to sort out a little thing like that.”

This was going too far. Carl Ritchie repressed his frustration and coldly retorted, “I’ll put the question to my line management, but I’d be astonished if we were able to make any such offer. We have already given a lot of ground for you.”

The buyer gestures toward her telephone: “Go ahead, Mr. Ritchie, put the question to your line management.”

But Carl has no intention of giving in to her pressure. He gets to his feet and suggests that he should call the buyer back the next day. He takes his leave with unconcealed frustration at seeing his sale delayed. Margaret Peake spends a couple of minutes sorting through her paperwork. She then picks out a file and makes a telephone call: “Hello, Mr. Martin? I have a problem, Mr. Martin, because your competitor, Mr. Ritchie, has been making some very tempting proposals. I’m afraid you’ll have to revise your tender.”