“Contingent pricing” Tactic in Negotiations

Description

This Skill Bit shows that contingent pricing is a flexible strategy that ties costs to specific outcomes or conditions, sharing risk between providers and clients. It motivates both parties to achieve project success by aligning payments with performance benchmarks. Advantages include flexibility, client assurance, and performance incentives. However, it requires clear agreements, measurable success criteria, and careful management to avoid disputes and cash flow issues. Effective implementation ensures mutual benefits and protects against uncertainty.

Duration approx. 5 Min.

Tier: advanced