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A to Z of Negotiation - M is for MESO

Ok, first things first here - we are not talking about soup!

In negotiation, we know that understanding the interests of the other party is critical to enable us to maximise value. We also know that while a party may have many interests, some of these will be more important to them than others. MESOs are a tool for assisting us to understand the relative importance of various interests to our negotiation counterpart.

MESO stands for Multiple Equivalent Simultaneous Offers. The idea behind the concept is that by putting forward multiple options to the other side, their response will give you more information about how the other side is prioritising its interests.

By providing a set of different options to the other party, we can use their responses to the options to identify their priorities. The key to using MESOs is that the different options we put forward should all be of equivalent value to us.

How to prepare MESOs

Imagine you are selling computer packages to corporate customers and you want to craft a MESO to put on the table.

Step 1: Identify your priorities.

So to start, we need to identify our own priorities. In this case, it may be that the unit price, timing of the sale, after sales service and future sales are all relevant.

Step 2: Create a scoring system

By allocating weighting to each of the priorities, you are able to create a scoring system to allow you to measure the value of different combinations of options.

Step 3: Create equivalent offers

Based on your scoring system, come up at least two offers which are of equivalent value to you but would meet the other party’s interests differently. You may come up with a few different pairs of offers to test a number of potential interests.

Step 4: Put each offer forward separately

Rather than putting all the different options forward at once, you want to put two offers forward at a time. There should only be one key difference between each offer if possible so the response to the offer will give you a clear indication of the other party’s interest.

A bit like an optometrist checking your eyes, each choice between pairs of offers will bring you clarity around what is important to the other party.

An example

Say you were selling computer packages and a customer has indicated they want 1,000 units. The various factors that are important to you may include: unit price, timing, locations, future sales and follow up service. Rather than offering a single offer to a potential customer, you could provide several offers which all give you the same amount of value. For example, the first options could be:

  • 100 units at $1,000 each to be provided now on a sale only basis

  • 100 units at $950 with a $100 per unit 12 month service contract.

If the customer expresses interest in the second option, even if they are not happy with the price, you get information that service is an interest for them and you can work this in to further options. You may then look at the possibility of future business by providing further options, say:

  • 100 units at $950 with a $100 per unit 12 month service contract

  • 100 units at $900 with a $100 per unit 12 month service contract and a commitment to replace all units after 2 years

From the customer’s response to these options, you will be able to get a sense of whether the client values a long term relationship.

When using MESOs it is important to leave some room for negotiation rather than putting your best offer on the table. You are trying to get information rather than a firm commitment at this stage. MESOs can also add complexity to a negotiation so avoid putting more than three options on the table at any time.

If you would like to learn more about how to use MESOs to improve your business outcomes please contact us to arrange a discussion.

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