Conflict of Interest
In my MBA final year viva, the panel was led by an industry veteran, a 1974 passout of UBS. The gentleman was into marketing of industrial inputs.During the course of my viva, I was asked to identify the "conflict of interest" that occurs between the vendor of a product or service and the customer in a B2B or industrial scenario. Mercifully after a little beating around the bush I answered the question to his satisfaction.
The conflict of interest arises due to the customers ever increasing expectations from the service provider. Modern managers realise the importance of delighting the customer, but how do you ever satisfy a customer who keeps raising the bar higher? Retaining an existing client is much more crucial than finiding a new one, we are told. But dealing with a purchaser/buyer whos primary motive is push down his costs (naturally) can be a tricky situation. If things get nasty every opportunity might be used to deride your project team's work, hoping to reduce the quotation of your firm's next bid with company.
So whats the solution? It lies in laying down the deliverables of your project on paper before the work starts, nomatter how much time and heated discussion in needs. In the end the parties should have an understanding that the vendor's performance would be based on how well he has fullfilled those deliverables and none other.
posted by Aditya @ 5/12/2006 08:29:00 PM
2 Comments:
hey ida,
well this is a problem i have face innumerable times when dealing with clients using our services.Very often we have the client deriding us from our work ethic to the proposals we submit.THe key we have relaised is let him go on and on,and then politely refer to the gareement which clearly defines the deliverables we offer him at what price.A client who knows his business will back down,but generally the case is not so.Hence we have realised a few concessions initially help a long way.Later on we have had these very clients referring us to bigger companies.But then i believe this may work only for start-ups and not well estabilished brands.
Just thought would share this with you.
regards
ridhesh
I couldnt agree with you more Ridhesh, and the point you make about the vendor's size is interesting.
Large and established vendors could dominate negotiations with their clients, unlike smaller firms who will try everything to retain a client.
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