Walking away gets less attractive for the other side when a negotiator, by legitimate means, lines up a competing supplier or another internal buyer, so agreeing becomes their better choice.
Borderline: whether this move is justified depends on the situation, and only the person in it can judge.
An example
An auto parts maker bought a precision cable assembly from a single supplier, and the supplier knew it. When the contract came up, the supplier asked for a nine percent increase and made clear that without it, it would let the contract lapse and sell the capacity to a truck maker. The purchasing director's problem was that the supplier's walk-away looked comfortable. Over four months she qualified a second supplier on two of the six assembly part numbers, put the qualification results in the file, and told the incumbent that from the next model year those parts would be split. She also told them, accurately, that the company planned to consolidate its remaining cable volume with whichever supplier offered better terms. Walking away now meant losing the whole account. The incumbent accepted a three percent increase and a three-year contract for the remaining four part numbers.
Why it works
Changing the other side's no-deal option makes their refusal look worse and costlier: walking away now means losing more than they had counted on, and the deal on offer looks better by comparison. Negotiations often stall because one side's fallback is comfortable, and once that changes, agreeing becomes the better choice for them on their own terms. The new alternatives have to be real, legitimate, and visible to the other side.
The thinking behind it
James K. Sebenius In 3-D Negotiation: Powerful Tools to Change the Game in Your Most Important Deals (2006), David Lax and James Sebenius describe setup moves that arrange, before talks begin, the right no-deal alternatives; changing what each side faces if there is no deal can change the agreement that is possible. Qualifying a second source changed the supplier's no-deal option from an easy lapse to losing the whole account, and the price it would accept moved with it.
When it fits
Fits negotiations where the other side's strength rests on your having no choice: a sole supplier, a single internal provider, a buyer with no competitor. You need time, the authority to develop alternatives, and the budget to make them real. Be careful with relationships you depend on for things beyond the deal at hand.
How to use it well
Ask what the other side does if there is no deal and why that looks acceptable to them. Then work on the facts that make it acceptable.
- Develop real alternatives: a qualified second source, another internal buyer, a different route to the goal.
- Make them visible through ordinary means, such as qualification, quotes, or announced plans.
- Tell the other side the facts plainly and accurately, and let them draw the conclusion.
- Leave them a deal they can accept with their standing intact.
Do not bluff. Every claim you make about an alternative should survive a phone call.
What it costs and where it backfires
Relationships you still need can suffer: an incumbent who feels squeezed may give you its weakest people or lowest priority. Building alternatives costs money and time. It stays bargaining only while the options are real and the statements true. Once you claim alternatives you do not have, hint at harm beyond your legitimate choices, such as damage to their reputation, or interfere with their other customers, you have moved from bargaining into deception or threat.
When it is used on you
Check the alternatives the other side has lined up: are they real, qualified, and within that side's authority to use? If they are, the price of your position has changed, and you should reprice. Look for what you offer that the alternatives cannot, and reopen on those terms.