Negotiating Tips November 16, 2023
What Is Something Worth? - Knowing What Something is WorthThere is a world of difference between what something is worth and what it costs. Things that cost little to produce can carry high price tags, and vice versa. Cost is subordinate to worth from a negotiating standpoint.
Worth analysis can shed more light on another party’s needs than volumes of cost data. Accountants and cost specialists have avoided worth because it is difficult to analyze and defend. Their avoidance is unfortunate because the key to setting sensible negotiating targets lies more in what a thing is worth than what it costs.
What something is ‘worth’ depends upon how we approach this value question.
Recognize that in negotiating an exchange of goods or services, each participant may value items differently. A buyer, the buyer’s organization, the salesperson, and the salesperson’s organization do not see the product or price the same way. The salesperson may view the sale in terms of a free trip toHawaii, while the buyer may perceive it as just another requisition to be disposed of. Neither may be deeply concerned with profit, cost, or use. The exchange of goods or services can be worth something different to every person involved.
Here’s just a few ways we can look at ‘worth.’
There are many ways to look at the broad question of ‘value’ and ‘worth’ – a very important component in any negotiation. Conduct a little ‘worth analysis’ the next time you plan for a negotiation. I find this useful when establishing targets.
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