The negotiation game has a lot going for it. Any salesperson who deals with an organized purchasing department will tell you horror stories about their negotiations.
The tactics can range from simple tricks to win us a few more euros to complex, well-organized strategies involving several elements of the customer’s company.
Sometimes we want to stand up and tell the customer to go to hell because of the posture he often demonstrates when negotiating.
I want to focus today on one of the most demeaning negotiation techniques I know.
I say demeaning because many times, the customer using these tactics forgets that he will lose the whole relational and trust component with the salesperson.
If you think that we often work with a client for several years, you can imagine that this is not a practice that we recommend, either from the Client’s or the Seller’s side.
The first of the negotiation tactics and concepts is called:
“Throwing the Clay to the Wall”
The scenario is simple. It is about asking for a quote and responding to that request by offering a much lower price than the initial one.
The funny thing is that this tactic can take many forms depending on the situation.
For example, your client takes his budget from the previous year and sends you an award based on that figure.
Another situation when there are supply contracts involved is to cross out the clauses that don’t matter, initial, sign, and return as if everything was agreed.
Or, in its simplest form, they take the proposal with the prices, cross out the value, and write underneath the value that interests them.
If it is by e-mail, they often write something like:
“Our management is pleased to award the proposal for X amount.”
As you can imagine, the X value is much lower than the one initially proposed.
Now, how do we deal with this tactic?
We make the decision based on the value presented by the client.
If it’s a value that doesn’t interest you, you inform the client of his mistake and reiterate the initial value.
If it’s a value that might be of interest, make the process difficult, say that this value is complicated to achieve, but that to meet their expectations, the most you could do is half that value but remove any component they need.
The mistake here is to think that the deal is already closed and that we don’t have to do anything.
Our client plays precisely with this psychological pressure of the “done” factor.
The point is that it is already done, but we have to meet what he wants.
We might be led to think:
“But, why should I make it difficult if it’s already closed and I can even come up with that amount?”
A good negotiator enjoys the “game” of negotiation.
He enjoys this cat-and-mouse game.
When the negotiation is too simple, he sometimes thinks he “didn’t put up a fight” and gets discouraged.
On the other hand, he may lose respect for us by thinking that we don’t know how to negotiate.
In other words, what costs nothing to obtain is what the negotiator usually doesn’t give much importance to, making our negotiating effort practically worthless to him.
Another problem is that “it’s so easy” that this time he asks for 5%, next time he asks for 7%, next time he asks for 9%, and so on.
We will be digging a short-term grave, which will certainly exhaust all our negotiating margin.
Finally, there is another factor that leads us to the conclusion that in most of these situations we should not go for a negotiation.
A negotiation has an upper limit and a lower limit.
The upper limit is the amount up to which our client is willing to go to buy.
The lower limit is how far we are willing to go to sell.
In practice, a negotiation must take place within these limits, and determining them is often the primary goal of a good negotiator.
Imagine that our client throws on the table a negotiation value far below the lower limit.
Do you think we should play the game?
As you are probably already imagining, of course not!
If we fall into the trap of starting to negotiate with the value they present to us, hoping to reach an acceptable value, what do you think we will achieve?
In most cases, nothing!
The negotiation effort will be enormous, and we will often only get a value slightly above the lower limit.
So, as you can see, sometimes, it is not always convenient to go to the game in a negotiation.
This is just one of the negotiation tactics in the sales landscape. As you can imagine, there are many more to be discussed.
Also published on Medium.