There are few “never do this” rules in the negotiation game. Ethical guidelines vary from company to company and across industries. What’s fair game in a foreign land may be absolutely unethical here. No matter how ethical and empathetic a negotiator you are, you will undoubtedly have to deal with companies or individuals that attempt to play tricks on you or get the best deal by going for the jugular-yours. When this happens, avoid angry responses that you will live to regret. Instead, stick firmly to your principles and make use of counter strategies. Pressure or negotiation tactics you may encounter include:
Nibbling
After an agreement has already been reached, naturally you feel good and are therefore more vulnerable than at other times. If you have just sold an expensive suit to an executive who has gotten a good deal, he may smile and say, “Since I’m plunking down so much money, I know you’ll be happy to throw in a silk tie.” You may be tempted to go along with the proposal, but a little thought tells you that a silk tie cuts too far into your profit margin. Then you will just smile back and tell the customer what an incredibly good deal he has already received.
Hot Potato
Sometimes a buyer begins by proclaiming that only a certain amount of money is available to work with, usually a very low figure. The buyer in this case is usually just fishing. The correct response is to say, “Fine,” and then test the validity of the statement.
It works like this. A customer may come into an appliance store and say, “I have $100 to spend on a compact disc player.” You might say you will be glad to work on such a purchase. Later in the negotiation, you might say, “If I could show you a $200 compact disc player that has the quality usually found in a $400 one, would you be willing to look at it?’ Asking this kind of question helps you determine whether the person is really serious about this limitation.
Higher Authority
Frequently the person with whom you are negotiating does not have the final authority to make the decision but must submit it to a loan committee, the board of directors, or a partner. You want to learn this early in the negotiation instead of after an agreement has been reached. Determine buying authority with a question: “When we reach agreement you will have final authority to sign the contract, won’t you?” The next best thing is to get some commitment. You might ask, “But you will recommend that they accept whatever agreement we reach, won’t you?”
Bad Guy, Good Guy
Sometimes in a team negotiation, members of the team play roles. One pretends to be angry about an aspect of the negotiations and then walks out. The one who stays acts amicable and understanding and asks to be given a break because the partner is so hard to deal with.
An effective counter is simply to recognize it and even bring it out in the open: “You wouldn’t play ‘Bad guy, good guy’ with me, would you?” The partners are usually embarrassed into playing fair.
Flinching
The simple nonverbal technique of grimacing or flinching when a price or term is proposed may be very effective. Be aware that a flinch may be play-acting. Ask questions to find out if some problem or objection still remains.
Red Herring or Decoy
This tactic is a statement that some aspect of the situation is not negotiable. The trick is that this is not the issue of true interest. This is what Br’er Rabbit did when he pleaded not to be thrown into the briar patch when that is exactly what he most desired. You can avoid being trapped by this tactic by active listening and perceptive needs discovery.
You should be prepared to handle three special situations that arise in negotiations: Ultimatums, trade-offs, and deadlocks.
Ultimatums: How do you react when a negotiator says, “There is no point in talking unless we get at least $250,000 out of this deal.” The best technique is simply to set aside the ultimatum. Go on, as though the point is not a big deal and find points that can be agreed upon to garner some momentum for reaching full agreement. If agreement is reached on other points, the ultimatum may become less important.
Trade-Offs: Negotiations usually produce a series of trade-offs. If you make a concession, be sure to ask for a comparable concession right away. If you fail to do this, the other party may later forget that you made a concession or it will not seem that you have done anything significant. Timing is of the essence in exchanging trade-offs.
Deadlocks: Occasionally, you may reach an impasse in a negotiation. The parties should agree to seek advice or mediation from a neutral party or to abide by some fair standard such as the legal or ethical considerations or the fair market value. Both parties involved feel pressure. Remember if you simply can’t reach an agreement, you can just walk away.
You may conclude that a negotiation has been a good one if neither party resents the other when it is all over. For your purpose as a consultative sales professional, both parties must feel good about the outcome and the relationship must be on a cordial basis. If the customer resents the way you negotiated, this order or contract may well be your last.