B2B Street Fighting Blog

3 rules to creating value in b2b negotiation

Posted by Marie Dudek Brown on Mon, Jul 16, 2012 @ 11:48 AM

3 rules for creating value in b2b negotiationKeep in mind three rules in regard to creating value in a business negotiation.  The first concerns the meaning of value itself, which is expressed as Value = Benefit - Cost.  We've all heard about sales processes that are supposed to add value but hardly ever succeed in creating real, measurable business value.  A process does succeed when it enables you to add "hard" value (value you can measure) rather than "soft" value.  If you can't put a potential trade through the equation above, you're not creating value.

The second rule is:  Never concede - always trade.  If you simply concede on an item during a negotiation, you are eliminating the possibility of creating value because value is created by trading items that have differing importance to the two sides in a negotiation.

The third rule is:  Never negotiate one thing by itself.  If you negotiate one item at a time, you will soon find that you don't have any other items with which to trade, and if you can't trade, you can't create value.

Creating value is something that has to work for both you and your customer, or it doesn't work for either of you.  Salespeople have two very good reasons to embrace the concept of value creation.  First, it makes it easier for you to negotiate with buyers because it's easier to divide a larger pie than a smaller one.  And, second, it enables you to make more money by providing you with the ability to make bigger deals, and over time bigger deals mean more money.  However, even though creating a larger pie and bigger deals is ultimately beneficial to both sides in a negotiation, buyers don't necessarily see it in that way.  Because, as a rule, buyers are primarily interested in lower prices, they're less likely to be concerned about value-creating trades.  And that's why it's often incumbent on you - the seller - to show the buyer how and why creating value can be advantageous to both of you.



Tags: business negotiations

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