Consequences of no agreement (CNA) analysis neutralizes virtually all of a buyer’s attempts to commoditize. It paves the way for productive and more collaborative discussion about what is really being bought and sold. CNA analysis guides you through developing your total value proposition and mapping that value to the customer, one deal at a time, shifting the negotiation conversation away from just pricing.
A CNA statement simply describes one alternative a buyer has if the deal with you falls through. It’s any reason (or tactic) he presents for not accepting your offer, whether it’s true or simply an opening to bargain. Our research on verbal negotiating tactics tells us that in addition to the most common CNA, “I will buy it cheaper from someone else,” there are many other common examples of CNA-related tactics you’ve likely heard over the years.
“I found someone who can do it faster.”
“We have our own print shop.”
“I’m concerned about late deliveries.” (I will choose a supplier with a better delivery record.)
“Your current/past service is/was poor.” (I will choose a supplier with better service.)
“We have some quality issues or back orders.” (I will choose a supplier with higher-quality products.)
“You know, your competitor’s available if necessary.”
“Oh, we do all of that in-house.”
While these tactics differ in flavor, they share a common theme: anytime a buyer refers to an alternative to doing business with you such as buying from a competitor, doing a job in-house, or even just doing nothing, he is comparing the value of your offer to the alternatives as he understands them. He is essentially saying that if our deal doesn’t close, he can get what he wants elsewhere. The consequences of not reaching agreement with you (hence the name consequences of no agreement) are as good as – in fact better than – your offer, thank you very much!
In the heat of the negotiating battle, these common buyer responses are quite effective tactics, prompting many salespeople to make concessions in order to win the business. Most often, however, the buyer’s perspective represented in each CNA is founded on the basis of incomplete facts. From this limited perspective, they view or present their view of your product or service as if it is “the same thing” as everyone else’s.
In reality, if the two parties don’t reach agreement, there will be consequences for both buyer and seller. Notably, you will lose the sale and the buyer loses the opportunity to receive the full value of what your product or business relationship had to offer.
It's your job is to keep this from happening. This is where CNA analysis will come in handy. You can use this extraordinarily powerful tool to research and analyze the CNAs for both sides of a specific deal so you can bring a full understanding of your company’s unique deal-specific value to the negotiation table. It gives you the ability to provide answers before questions are asked.
A world-class negotiator researches, analyzes and understands – in advance – the consequences for both sides of not reaching an agreement, including the soft costs, hard costs and even the possible benefits, both short- and long-term. By determining what will happen should the two sides walk away, the negotiator ultimately gains more power. The side with the better CNA – that is, the one that has less to lose if the deal falls through – naturally has more power.
When CNA analysis is done correctly, tactics based on posturing, bluffing, low-balling and the like suddenly become useless, and buyer decisions or biases based on incomplete data can be revealed for what they are. It enables you to know if a buyer is being truthful when he says he can get the same thing better, faster or cheaper elsewhere, and respond accordingly with facts and knowledge. Without this analysis, your response will just be a reactive shot in the dark. More often, out of necessity, you have been assuming the buyer’s tactics are facts, whether they are really true or not.
This is a good time to reiterate that a discussion about CNA analysis is not about price. Of course, price will eventually be part of the negotiation, but first it is imperative that we establish – for ourselves and, to some extent, on behalf of everyone at the table – exactly “what” we are selling before we can have a meaningful discourse about what it’s worth.
Keeps the Big Picture in Focus
CNA analysis also helps you keep all the pieces of the deal in context. Most buyers, consciously or not, accept a deal when it’s only marginally better than the alternative, and typically without having on hand all the data relevant to the products and value propositions on the table. So when a buyer says, “your stuff is the same as everyone else’s,” he may actually believe what he is saying, perhaps based on a bad analysis or after comparing only one aspect of your value (for example, only your price, service, flexibility or warranty) to the competitor’s. It makes no difference which aspect, as they are all part of the same problem: the buyer is taking one piece of a very complex deal out of context and focusing on it to make their decision.
Your job in this situation, quite simply, is to use the CNA data you collect and analyze to:
Recognize this tactic for what it is, then
Bring the overemphasized piece (or aspect) back into context with the overall deal.