Making a decision is the first step towards maximizing return.  Until that happens, we are operating in the theoretical world, not reality.  Once you have determined what type of decision you are making (covered here), we apply a simple scoring matrix to determine what type of BUYER will be best suited to make your decision.  This does not mean you cannot use other types, but using this will determine the optimal type for your decision.

Scoring for the three decision impacts:

Put a check mark in one column for each decision impact.  Total the marks and multiple by the factor at the top of each column.  Now add up the total score.

Based on the total score we can determine what type of buyer will be optimal given the decision impacts.  Again, this is not an exact science and you can chose to be whatever type of buyer you want!  The idea is to start thinking about making better business decisions that maximize your returns.

Let’s go through two examples:

Example A.

Purchasing a new accounting package for your company.  You have 50 team members and 5 people in your accounting department.  This is going to be run in the cloud by a provider that requires a 3 years commitment.  The pricing is less than 5% of revenue and the provider is used by many in your industry.

We see that this is clearly a tactical decision.  This aligns with our previous post’s description of what a tactical buyer should look for.  What if you could get the software on a monthly commitment?  Then you *could* be a low cost buyer, but don’t fall into the trap of not considering the painful switching costs!

Example B.

Review health care options for your business.  This is interesting because the default for many is to be a low cost buyer.  Clearly it affects everyone, is an annual renewal, and let’s assume more than 5% of revenue.

As in the example above this becomes a tactical decision.  Interestingly enough, the financial impact isn’t really the biggest factor here, it’s that it impacts the entire organization.  Often times, we look at the cost of something without understanding the overall effect.  In today’s employment environment, it is critical to have a good benefits package to attract and retain talent.

Maximizing the return you make on business decisions is essential to the long term profitability of your business.  At Stringfellow, we utilize this framework internally and for our Clients to enable them to make better business decisions daily!