Quick Negotiating Tip

In any negotiation parties will almost certainly enter a bargaining phase at some point. This is when either parties ask for something that is in their own interest.

For example can you give me 10% off and we have a deal. This can put a lot of external pressure on you to agree to the discount in order to secure the business.

But what do you do if you cannot drop your price by 10%? Do you simply say no and risk losing the business or be seen as confrontational?

When responding to a request like this, there are a number of things one can do. Here is one negotiation technique that is worthy of consideration.

Offer Vague and Ask Specific

In the event that you have been asked the question:

Drop your price by 10% and we have a deal.

Respond with the formula “Ask Vague, Offer Specific”. Say something like this:

We may be able to consider discounts (vague) but we would need to increase the order by at least 30% in order to do that (specific). Would that be possible?

Alternatively

OK we may be able to look at our discount structure (vague) however we would need to agree a two year term in return (specific). Would that be possible?

You can play around with this “formula” by changing what it is that would be of interest to you. Hope you have found this negotiating tip useful.

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Quick negotiating tip – Challenging an opening bid

One of the golden rules in negotiation is – always challenge an opening bid – even if it seems attractive at first glance.

Many negotiators fail to challenge an opening bid as they fear aggravating the other party. On the other hand some hard ball negotiators relish diving in headlong and challenging the bid.

That is expensive. You will have to do much better than that!

If you do not challenge the bid, you are simply storing up problems for later in the negotiation, as the other party believes you have psychologically accepted the proposal/price. However challenging an opening bid aggressively head on might set the tone for the rest of the negotiation making life more difficult than it needs to be.

The key here is to challenge the bid without being overly aggressive. One possible way to do this is to ask the other party to justify their offer.

Tell me………How did you come to that valuation – assessment – price etc?

Do this with a mildly curious sounding voice and you can subtly challenge the bid without causing offence. The other party now has to justify their initial pitch. Done well the negotiation should enter into a phase of dialogue based around value propositions rather than positional statements.

The reason why we think our offer represents good value is…………………………

This justification of their opening offer is likely to release previously unknown information into the open.  This information can often be used to glean where the real value lies in any negotiation and can set a positive tone for subsequent discussion.

Remember, a good negotiator will challenge opening bids. Be prepared to justify your offer. Having a well prepared response to a challenge  will not only make you look professional but increase your chances of securing a good deal for both parties based on shared value.

Negotiating Tactics – Recognise and diffuse them

istock_000000409040_l1You are in the clients office looking to negotiate a valuable contract. You have been told by your Sales Director not to bother coming back without a deal and your client is using negotiating tactics to put you under pressure to concede at every turn. One by one you give in to all their demands There you are doing your very best in the middle of a heated negotiation and out comes the vice and the broken record technique.

Buyers have been using negotiating tactics since time began, to win concession after concession in business. One thing is clear; they do work or people would not use them in the first place. After all, should a buyer successfully use a negotiating tactic against you, then it follows that they will use another and yet another until you finally learn how to counter these tactics. Good negotiators are able to recognise a tactic and diffuse them.

So what tactics are out there. Well there are too many to cover in this article so I have highlighted a few that I have experienced.

The Vice

vice

This does exactly what iy says on the tin. It is designed to squeeze you into conceding on one or several points at once.

You will have to do better than that.

followed by deadly silence prompting you for an answer. Now the pressure is on you to come up with something better. This is often combined with the broken record technique. This is where the vice is simply repeated as if stuck in the groove of an old broken record

You will have to do better than that

I have seen many a salesperson simply collapse and  improve their offer when faced with this tactic. Do not offer any improvement or you will hear;

You will have to do better than that

once more

What do I do now? I gave them a better offer and they are still asking for more. You can only spiral downwards from here.

The simple answer is to break this cycle by asking,

Could you be more specific? Where in particular do we need to be better?

You have now got them talking about specifics and can now re-enter negotiations. At the same time the other party will recognise that you are capable of diffusing a basic technique and this alone may get them to change negotiating behaviour.

The Monkey on your back

monkey

Some negotiators refer to this tactic as the ‘shuttlecock’ or ‘the ball is in your court’. I prefer to visualise it as a monkey on someone’s back. Some negotiators have the irritating habit of handing their problems to you so that they become your problem. They attempt to put the monkey on your back leaving you to resolve the problem

In this situation I would recommend that you politely and skilfully pass the monkey back to the person or persons with whom you are negotiating. A typical example would be where a client says;

I can only afford £15,000. The budget will not stretch any further.

At this point you have the monkey on your back. In other words , if you cannot find a suitable solution below £15,000 there is no deal. Or so it seems!

The challenge here is whether or not the budget (monkey) is real or not. It may be that the other party has a higher budget and is wanting to peg your offer at a lower level than they would be prepared to pay for the right solution. You can either agree to meet their budget or try to pass the monkey back.

How do we find out if this budget statement is real without losing face? Hand the monkey back but let the other party feel that they are still in control. Look concerned and say something along these lines;

Oh that could be a problem. We have a number of options in our range of products/services. I really want to ensure that you get the best cost effective solution/s for your particular situation. Does that mean that if I have a product/service that satisfies all your needs costing more than £15,000 you would rather that I did not bring it to your attention?

The monkey is now on the other persons back. If the budget is fixed he will say so. However, if it was an attempt to put down a marker, they will suggest that you show/explain all options within a range and they will make the final decision on whether they can stretch the budget or not.

It is important that as a negotiator you are able to deal with many types of negotiating tactics. There are many other tactics that I cover fully in my negotiation workshops.

  • Time Out
  • Use of silence
  • Under the spotlight
  • Salami
  • Trojan Horse
  • Good Cop Bad Cop
  • Power of legitimacy
  • Use of a higher authority
  • Preconditioning

etc.

Happy negotiating.