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For you and me, if we've only got one or two prospects, we don't have any flexibility. Each opportunity is of the highest importance.
If you close it, you're a hero - and you've some money in your pocket. (Assuming it's priced right.) But if you don't you're in trouble.
When you've lots of prospects, no single opportunity is that important to you. If it closes, that's wonderful, but if it doesn't, you know that one of your others will.
A customer who is only interested in doing business with the supplier with the lowest price has no interest in developing long-term relationships.
In Boeing's case, the WSJ article gave the impression that they were starting out as the underdog. On at least one occasion Boeing tried to change the topic of discussion from price to aircraft performance.
Iberia wasn't interested in discussing performance or the fact that Boeing's aircraft had lower maintenance costs. The only thing they were interested in was price.
Imagine what would have happened if Boeing had said at that point that it wasn't interested in only discussing price and would decline to bid on Iberia's order.
Iberia would have been in a terrible bind. You can't squeeze your suppliers if you've only got one supplier bidding.
By threatening to walk away the negotiating strategies change. The leverage could have shifted to Boeing's favor.
I know that it takes guts to walk away from what could be a very important order, but you want to be negotiating on mutually beneficial - and profitable - terms.
2. Change The Subject To Value/Benefits
Verizon considers their technology purchases to be identical commodities. From their perspective, there is no difference between IBM, HP, or Sun.
From the article it appears that none of the companies tried to differentiate the products and services that it sells from those of its competitors. When the customer views a product as a commodity, price is the only thing that matters.
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Copyright © 2005, Jeffrey J. Mayer. All Rights Reserved.
Copyright © 2005, The Negotiator Magazine