Adapted from “Putting More on the Table: How Making Multiple Offers Can Increase the Final Value of the Deal,” by Victoria Husted Medvec and Adam D. Galinsky (professors, Northwestern University), first published in the Negotiation newsletter.
Suppose you open talks with an important customer by making an aggressive first offer. He becomes offended. You back off a bit; he responds by trying to take advantage. This back-and-forth negotiation process, which many liken to a dance, can leave you shuffling endlessly around the issues, while resentment builds on both sides.
Fortunately, a versatile strategy exists that allows you to take the lead in the dance: multiple equivalent simultaneous offers, or MESOs. Presenting more than one offer at a time increases the other side’s satisfaction as well as the odds that an agreement will be implemented, according to research by professors Victoria Husted Medvec and Adam D. Galinsky of Northwestern University. In addition, MESOs allow you to be both respected and liked, two important dimensions of evaluation. Our research has shown that negotiators who use MESOs achieve better outcomes than those who make a single packaged offer, without sacrificing relationships or losing credibility.
MESOs allow both a profitable agreement and a positive interpersonal climate. Making MESOs lets you collect and integrate complex information, balance aggression with cooperation and persistence with flexibility, and achieve novel outcomes.
Suppose you’re negotiating an assignment with one of your clients, who typically pays a retainer for your services. Receiving payment immediately is important to you, but the client keeps insisting that she can’t pay you up front this time. Rather than continuing to argue this point back and forth, consider why she may not want to pay you up front. Is it impossible for her to make up-front payments, would she simply prefer not to, or would she like to do so only under the right circumstances?
By presenting MESOs, you can understand what her statement truly represents. First, extend three initial offers that all include up-front payment. When the client continues to insist that she cannot pay you right away, replace one of your offers with a new offer that extends your payment by 90 days. This new offer reflects what the delayed payment will cost her, such as an increased price, less service, or more client responsibility. This offer, extended in conjunction with two offers with up-front payment, lets you remain focused on your top priority, while showing the other side the tradeoffs required for extended payment terms. Through your MESOs, you can gather better information, convey more information, and remain persistent.
No Responses to “Put More on the Table”