B2B Street Fighting Blog

the fixed price negotiation conversation

Posted by Marie Dudek Brown on Fri, Dec 14, 2012 @ 09:51 AM

which choice would you make?I'd like to invite you to a fancy restaurant tonight.  But this is not just any fancy restaurant.  It is the type of restaurant you read about in the tabloids because celebrities are always there.  It's the kind of place you normally have to book at least six months in advance.  It's the kind of place with three-hour waits and long lines at the valet stand as the paparazzi peer around to look at someone famous inside.  Now, this restaurant doesn't have a fancy name, but I'm sure you'll recognize it.  It's called the Fixed Price Negotiation.

Funny thing about this place, there's not a lot of variety.  In fact, when you walk through the front door, the maitre'd grabs you by the scruff of the neck and shoves you toward the worst table in the joint.  He sits you down and says, "This is where you're going to sit," no ifs, ands or buts; no discussion about window seats or booths versus tables.  Then he whips out a menu, points to a meal you may or may not want and says, "This is what you're going to eat," ...forget the fish of the day, the soup du jour or the chef's special.  Then he closes the menu before you can even see the price and leans down to whisper in your ear, "This is how much it's going to cost."

That doesn't sound so appealing, does it?  So let me invite you to another restaurant where there are no lines and you're always the most famous person in the joint.  Here you get to sit wherever you want; by the window, in a cozy booth for two in the corner or at a special table in front of the open kitchen line.  You have a variety of menu items and, what's more, you can select them based on quantity, taste or price.

"What's the name of this great place?" you ask.  It's called Multiple Equal Offers (MEOs).

We use MEOs to shift perspective from one fixed-price offer for your products and services to a choice of different business relationships, each of which focuses on value and problem solving in a slightly different way.  So instead of showing up with a hard, firm line in the sand with a fixed price wrought from thoughtful trading, you show up with three MEOs that are equal in value to you, but vary in value to the customer or, more accurately, to different influencers in the customer organization.

On the surface, this flies in the face of traditional negotiating advice, which discourages such behavior for fear of muddying the waters.  But what's the alternative?  The Fixed Price Negotiation (and none of us wants to eat there again).  At the Fixed Price Negotiation you sit down at the bargaining table, shove a sheet of paper across the table, sit back, fold your arms and say, "Here's our offer."  Ouch!  What does that accomplish? It immediately sets up a competitive atmosphere and, mathematically speaking, a zero-sum situation.  In fact, you could even say it begs the question, "Do you think you can get this cheaper elsewhere?"

MEOs help you combat the disconnect between selling value and then negotiating prices of products and services by enabling you to come to the table prepared with something for everybody.  Your thorough analysis of the real facts of the deal combined with knowing what all the influencers need from this deal makes you the only seller capable of offering the customer exactly what they need.  Your offers and the value they represent can no longer be compared to those from "someone else."

Your competitors either lose out immediately with their stubborn insistence on dining at the Fixed Price Negotiation or, at the opposite end of the spectrum, with their giveaways of the farm because they're unprepared or have no formal negotiation strategy.  Meanwhile you can serenely present three MEOs that make the buyers on the other side of the table feel like you are willing to go the distance.

Tags: negotiation skills for sales

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