Value creation
Stop Negotiating Price Alone
Price is visible, but it is rarely the only source of value. Tradeables turn a one-dimensional fight into a package deal.
Many negotiations collapse into a single question: how much lower can the price go? That question matters, but it is too narrow. A price-only conversation often becomes a game of give and give more.
Tradeables change the game. They are issues that can be exchanged, combined, sequenced, or monetised: payment terms, contract duration, volume commitments, service levels, warranties, delivery time, minimum order quantities, additional business, capacity access, forecasts, implementation support, and many others.
The discipline is to build a long list before judging. Teams often stop too early because they confuse must-have criteria with tradeables. A must-have condition is a boundary. A tradeable must be movable. If it cannot move, it should not be treated as a bargaining chip.
Once the list is built, tradeables need to be valued. Otherwise the team cannot know whether a concession is smart. Is a five percent price movement worth a longer term? Is faster delivery worth a different payment schedule? Should a supplier get a larger share of future demand in exchange for better terms today?
- Create options before deciding which ones to use.
- Separate kick-out criteria from genuine tradeables.
- Monetise tradeables so exchanges can be compared.
- Negotiate the best package, not the best single issue.
Good negotiators expand the pie before they divide it. The more issues a team can structure intelligently, the more room it has to create value and still protect its walk-away.
## Key takeaway
If your tradeables list is short, go back to information gathering. A thin list usually means the team has not explored value deeply enough.
Many negotiations collapse into a single question: how much lower can the price go? That question matters, but it is too narrow. A price-only conversation often becomes a game of give and give more.
Tradeables change the game. They are issues that can be exchanged, combined, sequenced, or monetised: payment terms, contract duration, volume commitments, service levels, warranties, delivery time, minimum order quantities, additional business, capacity access, forecasts, implementation support, and many others.
The discipline is to build a long list before judging. Teams often stop too early because they confuse must-have criteria with tradeables. A must-have condition is a boundary. A tradeable must be movable. If it cannot move, it should not be treated as a bargaining chip.
Once the list is built, tradeables need to be valued. Otherwise the team cannot know whether a concession is smart. Is a five percent price movement worth a longer term? Is faster delivery worth a different payment schedule? Should a supplier get a larger share of future demand in exchange for better terms today?
- Create options before deciding which ones to use.
- Separate kick-out criteria from genuine tradeables.
- Monetise tradeables so exchanges can be compared.
- Negotiate the best package, not the best single issue.
Good negotiators expand the pie before they divide it. The more issues a team can structure intelligently, the more room it has to create value and still protect its walk-away.
## Key takeaway
If your tradeables list is short, go back to information gathering. A thin list usually means the team has not explored value deeply enough.Tradeables change the game. They are issues that can be exchanged, combined, sequenced, or monetised: payment terms, contract duration, volume commitments, service levels, warranties, delivery time, minimum order quantities, additional business, capacity access, forecasts, implementation support, and many others.
The discipline is to build a long list before judging. Teams often stop too early because they confuse must-have criteria with tradeables. A must-have condition is a boundary. A tradeable must be movable. If it cannot move, it should not be treated as a bargaining chip.
Once the list is built, tradeables need to be valued. Otherwise the team cannot know whether a concession is smart. Is a five percent price movement worth a longer term? Is faster delivery worth a different payment schedule? Should a supplier get a larger share of future demand in exchange for better terms today?
- Create options before deciding which ones to use.
- Separate kick-out criteria from genuine tradeables.
- Monetise tradeables so exchanges can be compared.
- Negotiate the best package, not the best single issue.
Good negotiators expand the pie before they divide it. The more issues a team can structure intelligently, the more room it has to create value and still protect its walk-away.
## Key takeaway
If your tradeables list is short, go back to information gathering. A thin list usually means the team has not explored value deeply enough.