One of our WTP clients is a major player in the DIY wholesale industry. Our client has been using WTP since the beginning of our existence and is known within Buynamics as one of our launching customers. Being one of our first customers, we have always had a good relationship with this client. As a result, we can easily support them in using WTP because we keep each other well-informed. This creates a win-win situation for both parties.
Approach with WTP
In recent years, this customer’s demand from one of their largest suppliers has increased dramatically. However, they never saw any benefit from this and always paid the same price for the individual products. After advice from Buynamics, they made a big bet on this.
The WTP application looked at the 3 industries where our client’s supplier is active. The volume was then translated into an index and entered into WTP.
In this example, the figures mentioned in the ‘let’s grow’ function of WTP were not used. This is because the customer is the market leader and it may then make more sense to hear the figures from the suppliers’ mouths. This means that we could calculate with a higher percentage of fixed costs than what the rule of thumb usually takes into account.
Because a retrospective calculation was shown to the supplier, it was not possible to get the cash value in back for the earlier years.
This benefit was factored into the “marketing money” coming from the supplier.
In addition, the well-known WTP discount ladder became part of the contracts. As a result, the customer uses an open-cost model when it comes to growth in the number of units. This is a tremendously nice result.
In addition to the supplier’s growing marketing budget, the customer has also been able to receive an amount of almost 75,000 euros for the current year.
Because of these savings (and we are only talking about one negotiation), all the costs for the WTP application have been recovered.
In addition, it has created a better relationship with the vendor. The client can now also conduct data-driven negotiations with them.