There’s something more important than price? Yes! It’s hard to believe that, occasionally, there’s actually something more important than price in the context of a negotiation. While many commercial negotiations include a discussion around price or costs or money, it turns out that it’s not the most important thing when buyers make a decision. You might not believe what’s most important.
In our annual Buyer/Seller Survey, we asked buyers to rank, in order of importance, a variety of factors that influence their decisions. That list included everything from price to relationship to the cost of changing. Here are the 5 factors that rose to the top:
#1) Quality of solution
#2) Price of solution
#3) Previous experience with vendor
#4) Strength of relationship with vendor
#5) Demonstrated results with vendor
Quality and price were the runaway winners, with more than 52% of respondents putting quality at #1 or #2, whereas only 42% put price at #1 or #2. Yes, that’s quality over price. Not to be overshadowed, 40-50% of respondents placed previous experience, strength of relationship, and demonstrated results in the top 3.
Let’s put this another way: Of the top 5 most important factors influencing buying decisions, only 1 had to do with money. Therefore, the old adage “money isn’t everything, it’s the only thing” just doesn’t apply — at least not at the negotiating table. So how do you use this knowledge to your advantage, particularly if you don’t want to make your negotiation all about money?
Dig deeper. Whenever anyone starts to focus solely on price or costs, start asking questions about the other factors that will impact their decision. The more you know, the more you’ll be able to expand the conversation.
Make choices. If you’re familiar with marketing analytics, then you’ve probably heard of a conjoint analysis. It’s a way to determine how people value different attributes. The same can be done at the negotiating table. Giving the other party simple choices between a better price and reduced scope or a higher price and enhanced scope can help you to understand just how important the dollar-side of the equation is for them.
Explore the space. Explore the space of possibilities if money were no object. This is another way of suggesting that you work in hypotheticals. Using phrases like, “Just suppose we could change the price, what would that do to . . . ?,” see what possibilities exist beyond dollars and cents. This is a low-risk method of determining what factors are important to the other side besides money.
Once you’ve been able to determine all of the factors that are important to the other side, make them a part of your proposal. Make sure they’re addressed and continually brought into the conversation. This will ensure that they stay relevant to the decision-making process, even if the focus does turn to price. And no matter what, always remember that money isn’t everything, it’s only one thing.
We Can Help Make Your Negotiations About Something Other Than Money.
Research has shown that the old adage “money isn’t everything, it’s the only thing” doesn’t apply — at least not at the negotiating table. So how do you use this knowledge to your advantage in your dealmaking, particularly if you don’t want to make it all about money? We can help! Drawing on 45 years of real-world negotiating experience, we’ll assist you with getting better deals, saving time, and creating value for all involved — not to mention preserving and even strengthening relationships. Let us partner you with one of our advisers, ensuring that you’ve got the broadest view of your deal.
Talk to one of our experts today:
P: 04 2979069