The first speaker is Sarah. She is American. She works for Venus Systems, and she is the CEO. The second person is John. He is British. He works for ABC Solutions, and he is the sales director.
John would like Venus Systems to sell ABC Solutions software in the USA and Sarah wants to find out more information about this proposal.
Sarah: Good morning, John. It’s good to see you again. Please take a seat.
Lewis: Hello again Sarah. Thanks a lot.
Sarah: So tell me, how was your first evening in New York?
John: I started with a walk in Central Park, and then I had a fantastic meal in a Mexican restaurant that I had read about in my guidebook. I wanted to go for another walk after the meal, but I was exhausted, so I had an early night.
Sarah: Oh, of course! You were probably suffering from jet lag. Are you feeling better this morning?
John: Yes, I slept like a log, so I feel much better today.
Sarah: Well, that’s good, because we have quite a few things we need to discuss. Shall we get down to business?
John: Absolutely. Where would you like to start? Let’s talk about the pricing of your accounting software.
Sarah: How much does it cost to the customer?
John: The software is sold as a yearly subscription. The full cost to the customer is $2 ,500 per year. What is included in that price? The price includes five licenses for the software.
John: So that means up to five users on the customer’s network can access the software.
Sarah: What happens if the customer would like more than five licenses?
John: Additional licenses can be purchased for $400 per license per year.
Sarah: So for ten licenses, a company would have to pay $4 ,500. Is that right? That’s quite a lot of money.
John: Remember that this software is designed for small businesses. It’s unlikely that a small business would need more than five licenses for their accounting software.
Sarah: Hmm, yes, that’s true. Do you have any figures on that? What percentage of your existing customers use fewer than five licenses?
John: I don’t have the exact figures with me, but I estimate that approximately 90% of our customers use fewer than five licenses.
Sarah: Ah, yes, well, that makes sense. You said that the software is sold as a subscription. So is that $2,500 a year, Really?
John: Yes, that’s correct. Unless the customer cancels the subscription, they will be charged $2,500 per year.
Sarah: What happens if one of the users has a problem with the software?
John: They can contact our tech support team. They are available 24/7.
Sarah: Let’s not discuss the ins and outs of support today. Let’s save that for another meeting. Let’s stick to the pricing discussion. Is tech support included in the price, or is it extra?
John: Yes, standard support is included in the price. Standard support is provided by email only. Gold support, on the other hand, is provided by phone and email.
Sarah: And how much is gold support? $300 per year per client. Okay, so now that I understand the pricing for the customers, what is your business proposal for us?
John: Well, it’s quite simple. We can offer you a 30% commission on all your sales of our products and services. 30%.
Sarah: Is that just for the first year or?
John: No, no. 30% is a lifetime recurring commission on all revenue that you generate for us. For example, let’s assume you sell five licenses plus a gold support contract to one of your customers. The customer would pay 2,800 dollars per year. 30% of 2800 is 840. So we would pay you 840 dollars per year until the customer cancels.
Sarah: Oh, I see. I like the fact that it’s a recurring commission.
John: Yes, it can become quite lucrative if the customer renews their subscription for several years.
Sarah: Yes, I’m sure. Alright John I’m going to need some time to think about this and to discuss it with my team later today. Perhaps we can meet up again tomorrow to discuss this further.
John: Yes, that is fine.
John: Tomorrow I’m available in the afternoon, if that is convenient for you.
Sarah: Shall we say tomorrow at 2 p.m.?
John: That’s perfect. I’ll see you tomorrow.
Sarah: Goodbye.