Posts Tagged ‘concessions’

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Escalation Power: How To Use It, How To Defend Against It

Friday, January 28th, 2011
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Sometimes Escalation Is Necessary…

Sometimes Escalation Is Necessary…

When we’re talking about negotiating and someone brings up the tactic of escalation what pops into your head right off the bat? Do you see yourself becoming frustrated with the person that you’re negotiating with and getting up and storming off to go have a talk with their boss? That’s one form of escalation, but that’s not what we’re going to talk about here – we’re going to talk about the other type of escalation…

The Escalation Tactic

During a negotiation you may find yourself in a situation where you’ve taken your price down as low as you can possibly go. However, the other side may not have picked up on the fact that they’ve reached the bottom and they may be pressing for even more concessions from you.

Simply put, that’s not going to happen. However, you need a way to signal to the other side that they’ve gone too far. At the same time you don’t want to lose this deal. Clearly a clever tactic is needed here.

When you use the escalation tactic, you revisit an issue that the other side thought was resolved, you apologize, and then you change it. Most commonly this involves raising your price.

A case in point would be if you were close to closing a deal and all of a sudden the other side of the table started to make a series of demands for shorter delivery times or asking for more time to pay their bills. Clearly you can’t accept these kinds of demands at this stage in the negotiations. By using the escalation tactic now you can go back and, after apologizing, raise the price that you had previously agreed to.

This is going to have a dramatic impact on the other side of the table. They’re not going to know what to do – now everything is once again up in the air. Assuming that they still want a deal (and they almost always do), they’re going to have to start to work to try to get the price back down to where it used to be.

By forcing them to do this, you will have effectively moved the focus of the negotiation from what they had been asking for back to the bottom line price. Once the original price has been reached again, the negotiations should be over and the issues that had been causing you problems should no longer be on the table.

How To Defend Against To Escalation Tactic

In the hands of a skilled sales negotiator, the escalation tactic is a powerful tool. That’s why if you find yourself sitting on the other side of the table when the escalation tactic starts to be used, you’re going to need to know what to do.

There is no simple way to deal with an escalation during a negotiation. What I can offer you is four steps that will provide you with a way to defend yourself against the full power of this tactic:

  1. Call Them On It: using this tactic resets the clock on the sales negotiation and is going to require that both sides invest more time and energy than they had originally intended to. The other side may end up not being willing to make this kind of investment. Challenge them and find out.

  2. Pause: stop the negotiations when the other side starts to use this tactic. This will give you time to consider both what they are now offering and will give you time to fully consider what all of your possible responses are.

  3. Mirror Image: hey, they are resetting the clock so why not do the same thing yourself. Review what’s been agreed to so far and pick out one of their hard won points and state that you can’t live with what’s been agreed to and state that it’s going to have to be renegotiated.

  4. Hit The Big Red Button: consider walking away from the deal. In fact, tell the other side of the table that you are considering walking away from the deal. See if this causes them to reconsider their use of this tactic.

What All Of This Means For You

Every negotiator needs to have a set of tactics that they can use in a variety of negotiating situations. Should you find yourself in a situation where the other side of the table is asking for too much from you, the escalation tactic provides you with an effective way to communicate to them that you are unwilling to budge.

The escalation tactic requires you to revisit some negotiation point, apologize to the other side of the table, and then undo the agreement that had been reached. More often than not this has to do with a previously agreed to price that you end up raising.

As a sales negotiator you are going to have to be careful when you use this powerful negotiating tactic. There are effective counter measures to it and if you aren’t fully committed to what you are doing, you may find yourself putting the deal at risk. The escalation tactic is one more tool for you to have on hand so that you can use it when the time is right.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™

Question For You: Under what circumstances do you think that using the escalation tactic would help you close a negotiation?

Click here to get automatic updates when The Accidental Negotiator Blog is updated.

What We’ll Be Talking About Next Time

How are your mind reading skills? Not so good? Dang – just imagine how handy that would come in during your next sales negotiation. You could just close your eyes and you’d be able to see what the other side of the table was thinking. I can’t help you get magical powers, but I might be able to do something that’s pretty close…

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Posted in negotiation tactics | 4 Comments »

Why Sales Negotiators Need To Watch Out For The Give & Take

Friday, January 21st, 2011
Image Credit Just When You Think You're Ahead, You May Find Yourself Losing!

Just When You Think You're Ahead, You May Find Yourself Losing!

You may or may not realize it, but the other side of the table in a sales negotiation might be as smart or even smarter than you are. I say this not to make you worried, but rather to make sure that you remain aware throughout the entire negotiation. A good example of this is the old “give and take” technique – just when you think that you are ahead, you may find yourself way behind all of a sudden …

The Give And Take Technique

The give and take technique of negotiating is very simple on the surface. In fact, when it’s being used, the side of the table that is using it will come across as being very agreeable and easy to work with.

It all starts with the negotiator that is using the give and take technique making a series of concessions to the other side. What may have seemed like significant issues that needed to be worked out before the negotiations started, quickly get resolved and often get resolved in favor of one side of the table.

As you may have guessed, this is all part of the tactic. In a sales negotiation things are never as straightforward as they may seem.

Why This Technique Works So Well

As things start to go better than expected for one side of the negotiation, a very natural thing will start to happen – they’ll let their guard down. When the give and take technique is being used, breaks or pauses in the negotiations are very important to the side that is using this technique.

The reason that these breaks are so important is because of what the side that is making the unexpected progress will do during those breaks – they will tell the world about how well things are going. This could be as simple as placing a call to their management.

What has happened contains the key to why this technique works so well. The other side of the table has now become psychologically conditioned to close the deal. Since they’ve told the world that things are going well, they have clearly communicated that a deal is going to be reached. Now they are committed.

This is when the negotiator that is using the give and take technique can strike. You can start to take back everything that you’ve already given. You can do this by demanding concessions from the other side that effectively weaken or even negate the concessions that you’ve already made.

An example of this would be if you had agreed to sell a piece of property to the other side of the table. Let’s say that you’ve made a big concession on the price already. In this second part of the negotiation, after the other side has already committed to making a deal, you start to turn the tables on them. You can demand that they pay for the survey of the property. You can make them pay this year’s taxes on the property. You can have them pay to move you off of this property and onto another piece of property. You can see how you can very quickly make back all of the money that you gave away up front.

What All Of This Means For You

The give and take technique is a clever way to make the other side of the table give you exactly what you want. It starts out simply enough with you giving in to the other side’s requests.

It’s important to take breaks in order to allow the other side to communicate to the outside world that they are making progress in the negotiations. Once that’s been done, the give and take negotiator can strike. Because the other side is now committed to making a deal, you can take back your concessions and get even more out of them.

It takes a great deal of planning in order to use the give and take technique. However, it is very powerful because it works over time – it’s never clear just exactly what you are up to until the negotiations are almost over. They say that it’s better to give than it is to receive, but in sales negotiations it’s actually better to give and take!

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™

Question For You: What do you think is the best way to defend yourself against the give & take technique?

Click here to get automatic updates when The Accidental Negotiator Blog is updated.

What We’ll Be Talking About Next Time

When we’re talking about negotiating and someone brings up the tactic of escalation what pops into your head right off the bat? Do you see yourself becoming frustrated with the person that you’re negotiating with and getting up and storming off to go have a talk with their boss? That’s one form of escalation, but that’s not what we’re going to talk about here – we’re going to talk about the other type of escalation…

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Posted in negotiation tactics | 2 Comments »

Why Sales Negotiators Like Salami

Friday, January 7th, 2011
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Doesn't Everyone Like Salami?

Doesn't Everyone Like Salami?

Who doesn’t like packaged luncheon meat? Well, ok, maybe a lot of people don’t, but at least when I say the word “salami” everyone gets a mental image of what I’m talking about: one of those sausage looking things that you buy at the store and then proceed to slice off pieces as you make things like sandwiches. Why is this so important that every sales negotiator should have one of them on their desk at all times?

How To Eat A Salami

Careful – if you take my advice and purchase a salami and place it on your desk, very quickly you are going to discover that this thing needs to be kept refrigerated. Don’t do it!

Instead, let’s think about how you’d use a salami if you bought it from the store. I guess that it’s always possible that you could use the whole thing all at once. Outside of being once very solid meal that would probably stay with you for the better part of a month, it would be almost impossible for a normal human being to eat an entire salami in one setting.

So how do we normally do this? In pieces. We’ll buy the thing and stick it in the fridge. The next time we’re fixing lunch, we’ll cut a slice off. If we happen to be wandering through the kitchen and realize that we’re hungry, we’ll cut a slice off. If we’re fixing a salad for dinner and we’re looking for one more topping, we’ll cut a slice off. Before you know it, the salami is gone.

How To Negotiate Using A Salami

Why all this talk about deli meat? Simple, it turns out that the more that you know about how you go about eating a salami, the better a sales negotiator you’ll become.

The reason is that one of the oldest negotiating tactics in the book is called the “salami tactic”. Perhaps I should explain.

During a sales negotiation, you’d really like the other side to just give in to all of your demands at the start of the negotiation. However, this happening is as unlikely as you sitting down and eating a whole salami in a single setting.

Much more likely is the other side giving in to your requests one by one over time. Small concessions by the other side go almost unnoticed over time – almost like when you were snacking on that salami that was sitting in your fridge.

Smart sales negotiators understand how the salami is going to be eaten and they prepare for it. They don’t plan on getting everything that they want right off the bat. Instead, they prepare their arguments and tactics so that they can go after the salami that they want, piece by piece.

If a discussion about one issue isn’t going well, a sales negotiator will switch to another topic. If he or she is able to get that piece of the salami, then they may come back to the issue that couldn’t be resolved and say “look, we worked out that other issue, how about if we just resolve this one”. By doing this, they may very well get their hands on yet another piece of the salami.

Eventually, by the time that the negotiation is over, the negotiator will have ended up with a majority of the salami that they had originally set their eyes on. What may have seemed impossible at the start of the negotiations, turned out to be quite possible!

What All Of This Means For You

Although it might strike you as a bit odd to use a luncheon meat as an example of how best to conduct a sales negotiation, the salami is an important tool. Understanding how we eat one of these can show us the way to negotiating success.

Realizing that we can’t get all that we want right off the bat is important. The salami tactic shows us that if we can get pieces of what we want then over time we can end up getting most of what we were looking for.

A sales negotiator needs to have many tactics in their bag of tricks. The salami tactic is a classic that everyone needs to know how to use. Sorta makes you hungry, eh?

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™

Question For You: Do you think that it’s possible to break what you are negotiating for up into too many pieces?

Click here to get automatic updates when The Accidental Negotiator Blog is updated.

What We’ll Be Talking About Next Time

In order to be a successful sales negotiator you need to be able to walk away with the lowest prices when you engage in a negotiation. As you might suspect, the key is how you get there. Having multiple tactics that you can use is your ticket to success. The Krunch tactic is a classic tool that every sales negotiator needs to know how to use — and how to defend against.

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Why Professional Sales Negotiators Build A House Of Straw

Friday, October 22nd, 2010
Image Credit Using Straw Issues During A Negotiation Can Give You More Shelter

Using Straw Issues During A Negotiation Can Give You More Shelter

In order to make your next sales negotiation a success, you are going to end up having to make some concessions. Knowing that you’re going to end up having to do this means that you’re going to need to have some strategies up you sleeve relating to how you want to manage your concessions. One time-honored way to make the whole concession thing work out for you is to use “straw issues”. Let me explain myself…

What Is A Straw Issue?

A sales negotiation is simply a discussion about a set of issues. The number of issues that are being discussed can play a big role in the eventual outcome of the negotiations. The more issues that you have to discuss, the greater the probability that you’ll be able to reach an agreement with the other side of the table.

This is where straw issues come in. Straw issues are throwaway issues that you put on the table. You really don’t care that much about them; however, you present them to the other side along with your real issues. Their real value to you is in that they have an exchange value.

The beauty of straw issues is that the other side won’t be able to tell the difference between your real issues and your straw issues. This means that they’ll see your straw issues as being just as important as all of the other issues and assume that they need to be solved if a deal is to be reached.

How To Use Straw Issues

Face it – you’re going to end up surrendering your straw issues during the course of a sales negotiation. This shouldn’t be a big deal – that’s why the straw issues are there in the first place.

What you need to understand is what giving up a straw issue is going to do for the negotiations. The other side will feel an immense sense of satisfaction when they “win” on the straw issue. It will be a trophy that the other side will be able to show to their management. Additionally, the negotiator on the other side will feel a sense of relief just because another issue is off of the table now – they are that much closer to reaching a deal.

How A Buyer Should Deal With Straw Issues

Straw issues are a buyer’s best friend. You should make sure that at the start of the negotiations that you ask for more than you really want. This can include such things as the amount of time that you’ll have to pay for what you are buying, increasing your credit limit, changes to the warrantee, etc.

Keep in mind that you won’t actually get everything that you are asking for. That’s not the purpose here. Just by giving in on some of the issues that you don’t care about you’ll make progress towards the negotiating goal that you want to achieve.

How A Seller Should Deal With Straw Issues

As a seller, you’ve got to realize that there will always be straw issues on the table during any negotiation. This can be a powerful internal tool for you: as you clear the straw issues off of the table your management will believe that you are doing good work.

Just because the other side of the table shows up with a lengthy set of issues that they want to discuss, don’t despair. Recognize that many of the issues that they are presenting don’t really count and work to find out which one’s do matter. Most of the time you can get the other side to fold on most of the non-essential issues fairly quickly – unless they are an expert negotiator!

What All Of This Means For You

Half of the art of sales negotiating is knowing when to give in. It turns out that even this part of a negotiation can be managed. The use of straw issues can make your negotiating job a lot easier.

Straw issues are valid issues that you really don’t care about. By including them in the negotiations you provide yourself with additional ammo when it comes time to make concessions. Giving in on a straw issue can make the other side happy while not eroding your position on more important issues.

In the end straw issues are one more negotiating tactic that you have available during your next sales negotiation. Study it and you’ll understand how to use this powerful tool in order to strike better deals.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™

Question For You: How many straw issues do you think that you should include in your initial list of issues to be negotiated?

Click here to get automatic updates when The Accidental Negotiator Blog is updated.

What We’ll Be Talking About Next Time

So there you are in a sales negotiation, you like what is being offered to you but there is one small problem. You don’t have enough money to buy it. What can you do? Walking away is of course one option; however, maybe there’s something else that you can do. It turns out that this is right time for you to pull out the bogey tactic and give it a try.

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Tactics 101: Giving Away Nothing & Becoming A Litterbug

Friday, May 28th, 2010
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Is It Really A Gift If There’s Nothing In The Box?

Is It Really A Gift If There’s Nothing In The Box?

In the world of negotiating, the actual process of negotiating is very much an art. In order to be good at it, a master sales negotiator needs to have a complete collection of negotiating tactics at his or her disposal. Not every negotiation will call for every tactic to be used, but as any auto mechanic can tell you, having the right tool for the job can make your life a lot easier.

Empty Concessions Make The Perfect Gift

As a negotiator you will be expected to make concessions to the other side of the table during the negotiation in order to keep making progress towards an eventual deal. However, sometimes you may find yourself in a bind – they want a lower price and you can’t go any lower than you already are.

It is in cases like this that empty concessions can come in quite handy. Ultimately, the value of any given concession is determined by how the side that is getting it views it. This means that by identifying a negotiation point that means very little to you, but which means a great deal to the to the other side of the table, you will have found the perfect empty concession.

When you find yourself backed into a negotiating corner, an empty concession is exactly the kind of tool that you can use to increase the other side’s level of satisfaction without having to give in on a point that is important to you.

Littering Really Isn’t All That Bad

In some negotiations, it can seem as though the other side of the table holds all of the cards – you are at their mercy. However, this is never the case. The concept of “littering on their lawn” simply means that you have the ability to make statements that will cause them to pause and realize that what you are offering them has more value than they had originally thought.

The following four examples show how negotiating litter can be made to work for you:

  • Value: pointing out to the other side that yes, they could strike a deal with another company for a lower price; however, they would end up getting less value from the deal for the following reasons…
  • The Price Is Right: sitting down with the other side and reviewing both your costs and your prices can quickly show them that you really are making a reasonable amount of money on this deal – not too much, not too little.
  • We’re Different: point out why comparing your offer to another firm’s offer is not really an apples-to-apples comparison. Show that your firm actually provides many additional services.
  • Total Cost: just focusing on the price of the item being bought or sold can be misleading. Taking the time to discuss all of the costs of the deal, both before and after the sale, can show that your total costs are lower than the competition.

What All Of This Means For You

Nobody is ever born a top-notch sales negotiator. Instead, we all improve a little bit during every negotiation that we are involved in. A key part of this improvement is making sure that we know all of the tactics that we’ll need.

Concessions that mean very little to you, but which mean a great deal to the other side of the table are a fantastic tool to use when you find yourself backed into a corner. Casting doubt in the minds of the other side by littering on their carefully planned reasoning can cause the other side to become willing to reach a deal much quicker.

They say that knowledge is power and the more negotiating tactics you know, then the more negotiating power you will have…

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Help For Technical Staff

Question For You: If the other side doesn’t ask, should you make empty concessions anyway since they don’t mean anything to you?

Click here to get automatic updates when The Accidental Negotiator Blog is updated.

What We’ll Be Talking About Next Time

If you’ve ever taken the time to look at how a Ferris wheel is built, then you already know about one of the key negotiating techniques that top sales negotiators use when they need to defend a price…

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Posted in tactic | 2 Comments »

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