Name: Stepping Stone
AKA: Climbing the ladder, HK Love Affair, Getting the Right Sequence
Description: Using one partner or counter-party as a ploy to negotiate a better deal with a more desirable partner. Working your way up the ladder of potential partners.
Sample usage (Alvin and Bob):
Alvin – “Who is Quantum Associates?”
Bob - “Oh – QA. Yeah – they were an outfit I talked to a year or so ago.”
Alvin – “I met one of their new bizdev managers at a party last weekend.”
Bob – “A salesman from QA? What did he say?”
Alvin – “I didn’t get the impression he’s a big fan of yours.”
Bob – “Ours.”
Alvin – “Yeah. Not a big fan of ours. You backed out of deal with them last year?”
Bob – “No. I pulled out of a negotiation. I learned a lot about them, they learned a lot from me, and we decided not to go forward.”
Alvin – “You pumped them for information and spread the word around that you were moving into the IoT space. Then you signed an exclusive deal with someone else.”
Bob – “That someone else was Mississippi.Com, and that deal is the reason we are sitting here today. Yes, I did use QA to set up the bigger deal. But I never signed or agreed to anything. They were nice enough, but didn’t have much to offer as far as marketing firepower. MisCom did. It was a business decision.”
Intent: Increase the perceived value of your brand or organization by seeming to negotiate with key players in the counter-party’s market or industry.
Category: Relationship, but also useful as an Information tactic.
PIFH (Power/influence; Fear or Hope): Hope. Your counter-party thinks that you are a little out of his league, but he’s eager to prove himself.
Counter: Exclusivity. Big Guns. Foundation. Trial Balloon (with strategic commitment as the condition. “If I can give you this quality and this price, can you commit to giving me 60% of your production for the next 3 years?”)
Notes: This is the basis for one of my favorite negotiating texts – 3D Negotiation. The authors, Lax and Sebenius, are big proponents of “away from the table” negotiating moves, and they talk extensively about setting up the right sequence of counter-parties.
If you need a partner and there are 3 potential counterparties in a market you care about, what’s your approach? Start by prioritizing your potential partners into 1,2, and 3 rankings. #3 is probably going to be most anxious to start talking – and that should set the stage for #2 to get into the action. Once you have conversations with 2 potential counter-parties going, it should be a simple matter to get #1 interested, since it now looks like you may be a potential competitor.
Stepping Stones are going to give you two things – business intelligence and credibility. These counter-parties are going to explain the business, market & regulatory situation, and help you fine-tune your business model & strategy. The second thing it will do is give you credibility as you talk to others. If you do this right, your next rung on the ladder will be the one who initiates a negotiation – because he wants to steal you away from the first guy.
So once you are getting ready to talk to #1 choice, what happens to #3 nice guy? Sorry about that bud – you already served your purpose. If you are using this one, don’t plan on building any lasting friendships with the people you are stepping over to reach your goal. This is a Frenemy move.
If you suspect that someone is using this on you, then you can try to raise the stakes with Big Gun. If he has more power than you, then it may devolve into a sad little Marry Me until one of you finally walks away – him towards a bigger and better deal, and you back to your lonely office.