Negotiation Tips

Moving Your Negotiation From Price to Priceless

by Erich Rifenburgh

Ideas for moving B2B negotiations from competition to collaboration

As sellers, we often find ourselves bogged down in negotiations that focus solely on one aspect—typically price. I recall a significant home renovation project where my fixation on cost led me to choose the lowest bidder, a decision that came with its share of complications. This is a common trap not just in personal dealings but also in B2B scenarios.

In my experience dealing with buyers, it became clear that while price often dominates, it's usually just one of a narrow set of concerns. This focus can prevent sellers from understanding and addressing their clients' deeper business needs.

Stick with me, and I'll show you how to steer conversations beyond these limiting parameters to engage with and solve the challenges your clients truly face. This shift is crucial for moving from transactional interactions to valuable partnerships.

It’s time to flip the script on your buyers and move from a single offer to multiple offers with Optionality. Academics call these MESOs or Multiple Equivalent Simultaneous Offers.

Let’s break it down.

Multiple: Making more than one offer. Most experts agree that three is the right number.

Equivalent: Each offer has the same value to you. Basically, you don’t care what offer your buyer accepts because everything has the same value to you.

Simultaneous: You are delivering your options at the same time. I know, I know, but your RFQ doesn’t allow this. Do it anyway!

Options: Assuming that there is more than one negotiable, we give multiple offers with differing negotiable options.

The Pitfall of Single Offers: How They Limit Negotiation Outcomes

Offering just one option often traps us in a zero-sum game where we extract value for ourselves. In contrast, when we consult rather than sell, we tackle our clients' actual challenges, creating greater value for both parties. However, the shift to a consultative approach can be tricky; it requires building trust with clients who may be wary of sharing their business issues for fear of those insights being used against them.

From my own practice, presenting multiple options can significantly enhance collaboration. It opens up dialogue, encouraging both sides to work together towards the best solution.

Most sellers fail to recognize that creativity is crucial for successful selling.

One major pitfall for sellers is becoming trapped in rigid patterns and standard procedures that stifle creativity. Often, sellers are confined by the strict guidelines of RFQs, responding only to direct inquiries without offering additional insights or solutions.

To succeed, sellers must adopt a consultative approach to solve their clients' broader business challenges. This often requires thinking beyond traditional boundaries and standard responses. Success in sales comes from answering questions and creatively collaborating with clients to uncover and address their underlying needs.

A Single Offer is a Pitch; Multiple Offers are the Beginning of a Discussion.

Here are six reasons to start giving multiple options when submitting your next proposal.

  1. You appear more flexible and cooperative.
    1. People love choice, and the more choices you give your buyers, the less likely they are to be competitive with their counteroffers.
    2. People also see two or more offers as a sincere attempt to accommodate their interests, which makes them more likely to collaborate with you, which means more information.
  2. Flex your consulting muscle.
    1. As a seller, I believe it’s imperative that you see yourself as a consultant who is in the business of solving your client's problems. You aren't long for this world if you sell products and services and don’t consult. You will either be replaced by a more capable person or, worse, a more capable machine!
    2. By delivering multiple offers, you inevitably find yourself in a conversation that allows you to hoover up additional information for trading later in the negotiation. Always remember that information is the currency of negotiation.
  3. Sellers who deliver multiple offers can be more aggressive in anchoring their opening position.
    1. Aggressive single offers often trigger aggressive counteroffers, devaluing the offer or abandoning the negotiation altogether.
    2. Multiple offers are seen as more sincere attempts to accommodate interests and, therefore, have a stronger anchoring bias.
  4. Multiple offers Increase your credibility.
    1. Putting together multiple offers and understanding your client's business problems takes time. Your more comprehensive offer will demonstrate your commitment to helping them.
    2. Your client will likely spend more time contemplating the merits of multiple offers than single offers, keeping you at the top of mind as they go through their selection process.
  5. Opportunity for storytelling
    1. Frame your offers around a story, an opportunity to highlight the unique value you bring to your clients.
    2. Engaging in storytelling allows you to observe how your buyer reacts and possibly what they don’t value or are willing to give up. You can use this information to refresh your offer if necessary.
  6. Presenting multiple offers improves the probability that you will increase value for both parties.
    1. The more offers we present, the more likely we are to land on one that meets both parties' needs and increases the deal's value.

Now that you understand MESOs and why they’re so important, here are a few tips for using them.

  1. All offers should have the same value to the seller. You don’t care which one they accept.
  2. If you find that one of the elements in your offer isn’t attractive to your buyer, you should be prepared to start over and create three more offers. For example, if you offer access to technical resources as part of the deal but learn your buyer has no interest. Remove it and create three more offers that don’t include this potentially expensive (to you) option.
  3. Accept that some buyers will throw you out of their buying process for violating their rules. Good! Walk away! You don’t want to work with partners who don’t value your problem-solving abilities. Sticking with them will doom you to single-issue negotiations.

Although this newsletter is written from the seller's perspective, the above principles can be applied to procurement’s interaction with a sole source. I have procurement clients who have embraced this technique with success.

Want to dive deeper?

If you are ready to improve your skills and enter your next negotiation better prepared, join our public class or contact us to discuss how we can create something custom for your team.

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