Win-Win or compromise? What does win-win really mean?

by Alice Alessandri e Alberto Aleo

The expression Win-Win has been bandied about in economics for years now. Companies must pursue a win-win logic while sellers have to aim for a win-win outcome with their customers, so that everyone is ensured a happy ending. But what does all this actually mean? How should we behave? What are the tools and techniques required for an outcome that to many appears a utopia?

Photo by Kyle Glenn on Unsplash

Types of negotiation

Firstly, let’s be clear that in economics there are two types of negotiation strategies, those with a distributive structure or zero-sum and those with an integrative structure. In the first case, in every negotiation between two parties there will be a winner and a loser, whereas in the latter both parties can share a victory. To understand how the two types differ, think of the first type as a tug of war: the player who manages to pull more strongly on the rope will win; the only alternative is a draw, but there is no way that there will be a shared victory. To understand integrative games, consider instead two farmers who both have to plough their own fields, where one has the ox and the other a plough.

To complete the job effectively they must share their resources. In economics, and in sales in particular, obtaining a true WIN-WIN situation does not entail a compromise, where each actor gives up something to achieve the objective (thus generating a sense of frustration and desire for revenge), but rather transforming the negotiation into an integrative game.

Multidimentional sales

To accomplish this transformation we will need to understand what objectives we share with our customers and integrate them to create a solution that overcomes the conflict of interest and fully satisfies both parties. However, if we think of the sale only as a material exchange, in which the seller tries to obtain the greatest profit and the customer the lowest price, it will be very hard not to fall into the dynamics of a “tug of war”.

We should ask ourselves, “What else is the customer looking for apart from a low price?” Equally, we should consider “What else do I want to apart from a profit?” It will be simpler to answer these questions if we consider the sale within a longer time span, considering the whole relationship that connects us to our customers before, during and after the purchase. It is also useful to include, as part of the exchange, all the components of the supply system that can contribute to mutual satisfaction such as the experience, the value created ​​and the relationship that is established.

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Shared Value

When you have found the answers to the two questions mentioned above, you will see what they have in common. Do you want loyal customers? Well, your interlocutor also wants to buy from a reputable seller. Thus, the search for a stable relationship based on trust is a common goal on which to base your exchange. Should your customer request discount “to impress the boss”, you can avoid a tug of war centred on the lower price by suggesting alternative solutions to “keep the boss happy” (a strategic objective for you too!). You could offer extended warranties, longer payment times or added optionals, without affecting the price but ensuring mutual satisfaction.

A closer look reveals that the aims of the seller and the customer are often not at odds, but when considered together may indeed allow you to get results faster and with less effort.

Whatever you think of sales ethics, we can tell you that it does not involve the search for a compromise. Neither customers nor sellers will be satisfied by even a partial sacrifice of their own objectives.

Introducing ethics to negotiations, and the WIN-WIN idea from which it derives, does not mean asking both “contenders” to negotiate a truce, but rather focusing on shared goals by underlining how each needs the other to obtain a complete victory. If you still feel that this is difficult to achieve, you should look again at our article dealing with another conflict … the conflict of identity that you are fighting within yourself, and that hinders your ability to open your mind to new solutions.

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