An excerpt from
Aji Notes, Volume 3, written by Toby Hecht.
Aji Notes, Volume 3
(pages 84-88)
What Is an Offer?
An offer is a conditional promise.
It is an announcement people make that they would like to make and fulfill a promise to a prospective Buyer
… on the condition that …
… the Buyer makes a promise to pay a purchase price in return.
When businesspeople go to the grocery store, put a head of lettuce in their cart and pay the purchase price before they leave, they are accepting the grocery store’s offer.
It’s equally true that the grocery store accepts the businessperson’s offer to pay the purchase price.
To economists, there is no fundamental difference between businesspeople using currency to buy groceries and the grocery store using groceries to buy currency from businesspeople.
What Is a Transaction?
When people transact, they agree to exchange a good or service for a purchase price,
… to produce an outcome that increases their capabilities to survive, adapt and live a good life.
Employers design offers to transact with their employees and customers.
Employees design offers to transact with their employers.
Customers design offers to transact with Sellers.
Colleagues design offers to build their IR#4 Networks of Capabilities (IR#4 NWC, Part #6 of The Strategy).
When Sellers design offers that are fresh, new, highly valued and scarce relative to demand, they compel or seduce Buyers to:
1. Accept them quickly and easily,
… which lowers their costs to produce the transaction
2. Increase their willingness to pay a premium,
… which increases their revenues, profits and incomes
The 3 Design Methods
1. The Simple Method is to design two promises (A & B) that specify the promises both parties to the transaction make to each other.
2. The Legal Method
The Seller makes three legal promises to The Buyer.
The Buyer makes two legal promises to The Seller.
3. The Aji Design Method
It includes the first two methods and uses about 10 new strategic and competitive intentions, distinctions and commitments.
It shows businesspeople, and entire businesses, how to exploit the new strategic and competitive capabilities that computers and the internet make possible.
It is used to produce new competitive capabilities and advantages easily, enjoyably and definitively, and very quickly, that businesspeople can use to double their productivity, value and incomes, or that of their businesses.
* You can begin to learn how to design OPNS in the Introduction to Aji Course or The Aji Starter’s Course on aji.com.
#1 – The Simple Method: A conditional promise, with two promises
The Seller promises to fulfill “Promise A” — on the condition that — the Buyer promises to fulfill “Promise B”.
I promise to put four new tires on your car (A)
… on the condition that …
You pay me $175 (B).
I promise to manage your production team (A)
… on the condition that …
You double my base salary (B).
The first promise, Promise A, is made by the Seller to the Buyer to provide a good or service with specified benefits or conditions of satisfaction (COS).
The second promise, Promise B, is made by the Buyer to the Seller to pay a purchase price.
#2 – The Legal Method: Fulfills an offer’s five legal obligations, which must always include “by when” each one will be completed.
The Seller’s three transaction promises:
1. Fulfill (promised) conditions of satisfaction
2. Deliver goods/services (OPNS)
3. Transfer ownership
… on the condition that …
The Buyer’s two transaction promises:
4. Accept delivery
5. Pay the purchase price
The Seller says,
I would like to make three promises to you
… on the condition that …
You, the Buyer, make two promises in return.