Invariably, if a B2B negotiation turns into a fixed sum negotiation the single issue on the table is price. So, here are some general must do’s and tactics to employ when this occurs.

Prior to starting any negotiation, you must define the monetary equivalent of your ideal set of terms. This is called your Aspiration Price.  Also, you must define the monetary equivalent of your worst acceptable set of terms. This is called your Reservation Price. Anything worse than your reservation price means you should walk-away.  Why bother having a clearly defined reservation price you may ask?  Well quite simply, because it removes subjectivity and emotion once the negotiation starts.

Always look to un-bundle price before discounting because when you start to unbundle price, many aspects emerge which a) allow you to conclude a mutually beneficial deal, b) ensure you avoid a relationship killing confrontation and c) give you the opportunity to make concessions which are of small value to you but which are of high value to the other party. For example:

The Value of Money
– Capital amount – one lump sum, or divided into parts
– Recurring payments/ subscription vs. CapEx
– Payment terms – cash, credit, 30, 60, 90 days, delayed into different fiscal periods
– Net present value – money is worth more now and less in the future, so stagger the payments, either big to small or vice versa depending on the specific circumstances

Product Related
– Terms for core products vs. accessories vs. consumables
– New products vs. old products

Customer Value
– Annual value
– Lifetime value

Avoid a fixed-sum negotiation in the first place by; a) providing 3 options from the outset – never and I absolutely mean “never,” provide only one option and b) adding subject matter to the discussion. Whether you like it or not, the reality is that if the only issue negotiated was price, then you have almost certainly sub-optimised the deal – for you and the other party.