The devise “Competitiveness, the quality of being wanted despite de cost” is, in fact, an equation that only works when it is balanced.

We tend to look at the product like the one who needs to be competitive. This premise is wrong.

There are two parties: the first has money, the second has a product or a service. In an undistorted free market, they will exchange their possession (cash and goods) when both consider that they have reached the fair price. There is one price for things, but there is also one price for money.

The price for the money is the amount that the buyer wants to put on the table. An insufficient amount makes it not competitive because goods and time to provide services are limited, and maybe someone else will come and pay the necessary amount. This rule is present in our daily life, from the minimum salary a candidate is willing to accept for a job to the minimum price that an automobile company agrees to sell a car.

Negotiation has its limits and rules. In the most common cases, both sides know the conditions and the agreement goes straightforward. For instance, in the supermarket: items on the shelves have a price, it is not negotiable. If the buyer wants it, the thing will fall into the basket. Otherwise, it will stay on the shelf. Less strict situations permit bargaining.

A negotiation can fail. Failure implies that the seller’s product is not competitive (good enough) for the buyer and also that the money offered by the buyer is not competitive (big enough) for the seller.

I experienced one of these cases recently. From a close collaborator and friend, I received the contact of a company who needed a service composed of many tasks. Nothing too complicated, but with a significant risk in case of wrongdoing in one of those steps. I believe that responsibility needs to be valued. When something comes from a friend, you might look at tariffs from a more flexible perspective and agree on a discount. During a long period of two months, the requester kept pushing for price drops on one hand while postponing some of the initial requests on the other hand, on the base of good collaboration in the future.

I have learned that the future does not exist unless it is signed in the present, and sometimes not even then. I confess that I was observing with awe the insistence of that company in weakening their position as they needed this service much more that I needed the sum negotiated. Probably their misunderstanding of the situation was blurring their perspective. At the beginning of this week, after their last bargaining attempt, I sent an email ending our talks and asking them not to bother anymore. They tried to reopen the negotiations, but I refused, wishing them all well. Their possible money offer, not even at my normal conditions, was not competitive for me anymore because I had lost interest and trust. I sell services which imply a long term responsibility. To trust my clients and to have theirs trust is part of the deal. Once trust is lost, there is no reason to move forward.

Immaterial assets, such as the image of a brand, are an essential part of a good’s competitiveness.

In the case above, their immaterial asset was the respect I expected for my work. Sometimes money can be negotiated, but respect should never be.