Price haggling: Strategies to position value

Price haggling: Strategies to position value

In this issue of Negotiation Insights we consider ways sellers can minimise price-focused negotiations and build more mutually rewarding agreements.

In 1932 Charles Revson founded Revlon cosmetics, and when asked what he sold said, “In the drug store we make cosmetics. In the store we sell hope”.

By understanding that the need to look more beautiful and glamorous is a part of a woman’s identity, Charles Revson was able to use influencing strategies that helped women imagine a future with greater social acceptance and status. By doing so, he made price less of a buying consideration.

So what other benefits come from moving beyond the single issue of price?

Firstly by having more issues to consider, the risk of a winning or losing mindset diminishes. Secondly those involved become more motivated to jointly problem solve and change the negotiation process to unlock value. Thirdly the ability to strengthen relationships improves because the negotiation process has fewer power imbalances and creates a stronger feeling of fairness.

Whilst it can be difficult to avoid discussing price, particularly when a buyer has many sellers to choose from, there are practical strategies that can be used. For example, a software seller could shift a buyer’s focus from price to the value of time by discussing the costs associated with a project’s delayed start and the availability of people for commencement.

Our quick tips now offer a few additional suggestions.

Quick tips – Shifting discussions from price to value

  • Prior to agreeing on the negotiation process ask questions to establish; “When will you be ready to buy, and is there an approved budget, or budget approval process?”.
  • Agree on a negotiation process that includes the opportunity to understand how you can add value and how it will be assessed.
  • To minimise the risk of a buyer anchoring the negotiations to the seller’s costs, ask the buyer to jointly complete a return on investment analysis.
  • To help enable a win/win outcome, look to exchange concessions that are low cost and high value to each side. For example, a service provider might accept a higher performance level in a contract for first right of refusal on any future work.

Archive  

Avoiding Buyer's Remorse: Knowing when to close

Breaking deadlocks: AFL resolves stalemate

Changing Perceptions: Shane Warne recalls advice

Collaborating to create value: Power to the people

Creating points of influence: Russell Crowe gets his leading lady

Creating strong alternatives: Flying fresh milk to China

Cultural mindsets: SONY Walkman designed for harmony

Defining Fairness: US German trade negotiations

Difficult conversations: Thalidomide sufferers seek empathy

Elon Musk: When to Negotiate

Engaging the enemy: US and Taliban peace talks

Finding common ground: US Firearm reforms

Gun tragedies: We hear you

Hostage negotiations: A frontline perspective

Identity needs: Tobacco now a nobody

Influencing timelines: The brave new world of regulators

In Focus: Managing Power Imbalances

In Focus: Measuring negotiation costs

In Focus: Negotiating Teams & Coalitions

In Focus: Negotiating with agents

In Focus: The authentic negotiator

Leadership without authority: Reducing domestic violence

Managing COVID-19 Renegotiations

Managing uncertainty: New freeway gets a red light

Mindsets: It’s a choice!

Negotiation preparation: Prime Minster wins election

Negotiation styles: Managing aggressive behaviours

Price haggling: Strategies to position value

Problem Solving: Calm in the cockpit

Problem Solving: Delivering outcomes

Restoring relationships: Saying sorry

Setting the scene: Automotive executives fly into a storm

Shaping mindsets: AVIS We try harder

Taylor Swift: Giving others a voice

The power of language: A statement or a question?

Timing concessions: Bangladesh factory tragedy

Traits of skilled negotiators: Nelson Mandela

Verifying trust: World soccer cup and gulf of Mexico oil spill


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