Know Your Numbers

In this engaging post, Heidi Roizen recounts the story of licensing a software title to Next's Steve Jobs. She combined her financial acumen with her sales skills to create a win-win scenario for both sides. The money win:

I just needed to make my 15% look like his 50%.

To do so, I reduced the nut to split by first deducting the cost of packaging, of technical support, the salaries for some developers on my side of the business to implement fixes, and when I still couldn’t get the math to pencil out, I added a $6 per unit ‘handling fee’ thanks to some inspiration from an infomercial on the Home Shopping Network.   My new “Hollywood net” number read 50%, but fully-loaded it was pretty close to the 15% of gross I needed to make the deal work.  Magic!

Steve was happy with his 50% contract and the deal got inked.

This terrific story illustrates why sales representatives need to know their numbers.