Business Insight Zone

The Brett Favre deal offers a lesson in innovative pricing.

Stick with me, because you don’t have to be a football fan to appreciate this one. The deal struck to move the future Hall of Famer from Green Bay to the Jets has lots of angles — bad blood between Favre and Packers management, on-the-field implications — that need not detain us here.

What is worth noting is a key provision of the deal, explained in this NFL.com story, that governs the compensation Green Bay will get for cutting Favre loose:

The [fourth-round] draft pick traded for Favre turns into a third-round selection if he plays in 50 percent of the plays this season, a second-rounder if he plays in 70 percent of the plays and the Jets qualify for the playoffs, and a first-round pick if he plays in 80 percent of the plays and Jets make it to the Super Bowl.

In other words, the closer Favre brings the Jets to the NFL’s promised land, the more the Packers get. There are even more complex provisions in the deal that would tend to interest only diehard football fans. My point is that both teams went out of their way to make sure that they won’t feel burned if Favre overperforms or underperforms expectations.

Sweeten the deal to prevent “transaction remorse.”

Such complicated give-and-take is appropriate in this case because it’s so hard to know what to expect from a 38-year-old quarterback — even one who holds most of the NFL’s passing records.

Something in this vein may be appropriate for your business if you offer a product or service whose value is unclear. You know the value of what you offer, but how can you reassure your customers and vendors that they’ll be getting good value?

It’s an old idea, one embedded in the 90-day warranty, the subscriber loyalty program, the money-back guarantee. But why stop there? Why not come up with your own version of the Favre deal that alleviates the risk of buyer’s remorse — or seller’s remorse?

What are your ideas for helping your customers or vendors avoid transaction remorse?

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(Packers and Jets logos via Wikipedia.)