Three Offers Are Better Than One

by Brian Dietmeyer (Strategic negotiation consultant)

Many sales organisations have successfully transitioned from selling products to selling solutions, articulating value, and solving business problems. But when it comes to negotiating, all that progress goes up in smoke. 'Salespeople are selling value, but they're negotiating price,' observes Brian Dietmeyer, president and CEO of Think! Inc., a global strategic negotiation consultancy. 'They are selling complexity well, but then it becomes a commodity during negotiations.'

The solution, says Dietmeyer, is to use a strategy called 'Multiple Equal Offers' MEOs give prospects three choices to close the deal instead of one. In other words, rather than showing up with a single-solution proposal, you essentially say to the prospect, "Here are three different relationships we can have," and then briefly outline three options, ranging from least to most expensive. When you build those three options correctly, you shift your prospect's focus from, "You need to lower your price 5 percent," to, "We're not quite ready for #3, but #1 doesn't have enough, so let's go with #2."

That's not to say price won't be an issue - it will. In fact, Dietmeyer cautions sales personnel to "be prepared for customers to demand the highest-tier offering at the lowest-tier price and badger you to provide prices for each item in each tier." Don't do it, he warns. Instead, dig into the details of the offer and look for ways to trade out value. If the prospect wants a lower price for offer #2, find out which items in that tier aren't important to him. You can remove those items in exchange for reducing the price. Regardless of how the negotiation progresses, the bottom line is this: don't ever lower your price without getting something in return. Dietmeyer doesn't - and he's never lost a deal because of it.

This approach lays the foundation for a customer relationship built on respect. That's because when you simply give something away, such as an arbitrary reduction in your price to meet a customer's demands, it communicates to the customer that you were lying to them about your price; that it was initially higher than it needed to be. But when you trade, either reducing the value of your package to reach a certain price or getting something of value from the customer in exchange for lowering your price, the customer feels you've been honest with them and your price is accurate. In turn, they are more motivated to choose you over your competition.

There are several keys to making this concept work, says Dietmeyer. First, you have to really do your homework. Build each MEO from the ground up for your customers, structuring and titling them in a way that is meaningful to that customer. Second, come up with names that reflect the value of the package. The title is crucial, says Dietmeyer. Third, don't line-price the items in each package; instead, have a single bulk price for each of the three offers. And finally, when you first present the MEOs to the prospect, don't get down into the nitty-gritty of each one. Simply let the prospect know that based on your discussions and research, you have come up with three relationships (solutions) you and the prospect can have. Then give the name and a brief, one-to two-sentence outline of each one, and let the prospect start sorting and shifting through the offers. Once they've honed in on their preferred option, you can start delving into the details.

"The power of MEOs to create strong relationships and revenues will astound you," concludes Dietmeyer. Most importantly, they put you and your prospect on the same side of the negotiating table. When you give customers options and they feel they are in control of making choices and working collaboratively, they stop viewing you as an adversary and start seeing you as a partner.