Blog Post Don’t give it away, always trade it.

Don’t give it away, always trade it.
Nov

23

2015

Don’t give it away, always trade it.

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What do you think is the best two letter word for any negotiator? Give that some thought and I will let you know what I think at the end of this article.

In negotiation we are often tempted to give something away to show good faith, or to “throw in a little sweetener”. That may make you feel good but what do you think it does to your negotiating opponent?

The more you have to work to get something the more you value it. This is as true in negotiation as it is in life. The worst thing you can do to a good negotiator is to accept his first offer.

Many years ago I lived in north London but I wanted to move to Marlow. Marlow was then a lovely village just outside London on the Thames and this was an ideal place to live in the country and still be able to commute.

Whenever I travelled to Marlow I would look at the house that I wanted to live in. It wasn’t for sale of course but I would dream about living there. One day as I was passing my “Dream House” I noticed a man nailing a “For Sale” sign to the gate. Quick as a flash, I cancelled my next appointment and went to the estate agent to see if I could afford the property.

The Agent wasn’t sure about the price as the owner hadn’t decided so I asked for the owner’s phone number and gave him a call.

Before I spoke to the owner I decided the house was probably worth about 50,000 pounds (this was a long time ago), but I would try to lower the owner’s aspirations by offering low. When I spoke to the owner he told me that he hadn’t decided upon the price yet but what would I like to offer for the property. I told him that I could make a cash offer of 35,000 pounds and, to my complete surprise and concern, he said  “Done!”

“Why was he prepared to accept my first offer so quickly?”

You may say that I got a bargain, but I was not sure. I may have made a huge mistake. “Why was he prepared to accept my first offer so quickly?”

The next day I arranged to have the house surveyed to see if the roof or the foundations were collapsing, but they were fine. Next I went to the council to see if they intended building a freeway through the property, but there seemed to be no danger of that, so I walked down to the Thames (at the end of the road) to see if there was a chance of flooding but that was okay as well.

I moved into the property but I was still looking for “The problem”. Finally 6 months later I was having dinner with the very nice couple who lived next door and I asked them why I got the house so cheaply. It turned out that the owner of the property was desperate for money. He had a bit of a gambling problem and would have accepted anything  for a cash deal.

Well that was relief. I realised that I had got a real bargain and could now move on, but what do you think occurred to me that very moment? Yep, you’ve got it!

If the seller was that desperate to sell maybe I should have offered 30,000 pounds instead of 35,000 pounds and I may still have made it. The worst thing you can do to a good negotiator is to accept his first offer!

Always make your opponent work for it, he will value it much higher that way and you never know, you may end up with a better Win-Win deal than you expected.

Oh yes….. that two letter word. Did you guess it?  The best two letter word for any negotiator is “if”.

When the customer says he wants you to sharpen your pencil, or make him a better offer don’t just agree, even if you can, always make it part of a deal.

For instance:

If you increase your order I may be able to increase the discount to 6%.”

“I am sure we will be able to reduce the price a little if you are able to take one large delivery a month instead of  small ones every week.”

If  you are able to sign the order by Friday I am sure my Sales Manager will agree to an extra 1%”

If you accept the first offer or give in too easily, the good negotiator will always be wondering how much better a deal he could have secured. Make him work for it you will get more, and he will be happier.

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