There is a lot to be said about the negotiation game. Any salesperson who deals with an organized purchasing department will tell you horror stories about their negotiations.
The tactics used can go from simple tricks to earn you a few euros to complex and well-organized strategies involving various elements of the Client’s company.
Sometimes all one wants is to get up and throw the Client to the winds because of the attitude that they often show throughout the process.
Today I would like to focus on 3 of the most degrading tactics I know for a negotiation.
I call them degrading because many times when using these tactics the Client forgets that they will lose all the relational and trustworthy component with the Salesperson.
If you think about it, often you work with a Client for several years, so using this type of techniques is not something we would recommend, neither on the Client’s side nor on the Salesperson’s side.
The first of the tactics of the cycle of articles on negotiation starting today is “To Try One’s Luck.”
The scenario is simple; it’s about asking for a quote and answering to that same quote offering a much lower price than the initial one.
The funny thing is that this tactic can take many shapes, depending on the situation.
For example, your Client picks up the quote they have from you, from the last year and sends it for your approval of that lower amount.
Another thing that is usual, especially when supply contracts are involved, is that the Client deletes the clauses that do not matter to him, signs the document, and returns it to you as if everything is ok.
Or, in their simplest shape they take the paper with the quote and your prices, delete the amount and write down the amount they are interested in.
If this is by email, they often write something like:
“The Management of our company is pleased to approve the quote for the amount of X.”
And the amount of X, as you might imagine, is much lower than what is proposed.
But how should you deal with this tactic?
Purely make the decision based on the amount suggested by the Client.
If it is an amount you are not interested in, inform the Client of their mistake and repeat the initial value.
If it is an amount that may be of interest you, make the process difficult, say that it will be tough to get to that amount, but that to meet their expectations the maximum you could do would be half that amount, although removing from the quote any component they need.
Usually, the mistake at this stage is to think that the deal is closed and that there is nothing you can do.
Your Client plays precisely with this psychological pressure of the “it’s closed” factor.
The point is, it’s closed, but you have given in to meet their needs. You may be led to think:
“But why should I make it difficult, if it is already closed and it’s possible for me to do it for that amount?”
A good negotiator usually likes the “game” of negotiation.
They enjoy all this cat and mouse game.
When the negotiation is too simple, they sometimes think it “was too easy to get” and get a bit discouraged.
On the other hand, they may lose respect for you when they think that you don’t know how to negotiate.
I mean, if it’s easy to get, then it becomes something that the negotiator does not value much, which makes your effort practically worthless for him.
Another problem is that the process “is so easy” that this time they ask for 5%, but next time they’ll ask for 7%, then 9% and so on.
You will be digging a grave in the short run, which will surely deplete your entire negotiating margin.
Finally, there is something else that should make you not call the game in most of these situations.
A negotiation has an upper limit and a lower limit.
The upper limit is the amount up to which your Client is willing to go to buy.
The lower limit is how far you are willing to go to sell.
A negotiation must take place within these limits, the determination of which is often the prime objective of a good negotiator.
Imagine that your Client throws a bargain amount on to the table that is far below the lower limit.
Do you think you should call the game? Of course not!
If you fall into the blunder of starting to negotiate with the amount they present to you in the hope of achieving an acceptable amount, what do you think you will get?
In most cases, nothing!
The negotiating effort will be massive and you can often only reach a figure that is slightly above the lower limit.
So, as you see, sometimes in a negotiation it is not always practical to call the game.
This is just one of the tactics at the negotiating level in sales, there are many more to be addressed!