Pull Ahead of the Pack

By — on / Business Negotiations, Daily

Adapted from “Think You’re Powerless? Think Again,” first published in the Negotiation newsletter.

If your organization regularly bids for business, you may be accustomed to feeling like the weaker party, write Deepak Malhotra and Max H. Bazerman in their book Negotiation Genius: How to Overcome Obstacles and Achieve Brilliant Results at the Bargaining Table and Beyond (Harvard Business School, 2007). Those facing auctions that are won or lost based solely on price may find they’re constantly fighting an uphill battle for coveted contracts.

In such cases, your best option may be to change the game. Instead of accepting that you’ve got to compete on price, find ways to show your desired partner that you offer better all-around value than your competitors. If you have a highly reliable product, a stellar reputation, or impeccable service, it’s up to you to convince other parties that they would benefit from working with you.

How can you educate an individual or organization that’s fixated on short-term pricing (or another single issue) that they’d get a better long-term deal from you? First, write Malhotra and Bazerman, submit two or more equivalent bids simultaneously, such as one that’s low on price and service and another that’s higher on both.

Second, even if you lose an auction, reach out to the potential customer with a multi-issue package. Assuming your bid was in the low range, the customer may be tempted to work with you instead of the rock-bottom bidder.

Finally, reach out to potential customers between auctions. Encourage them to discuss their needs and then show how you can meet those needs. By doing so, you may lock up a deal before it has a chance to go to auction.

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