The Art of Haggling – Part 1

SalesmanLet’s assume that you’ve reached a point where the customer or client is ready to buy!

You’re not home and dry until they’ve signed on the dotted line, are you? So how fast or slow this takes depends on how good you are at striking a bargain.

You may think this is easy, but it’s where deals are often lost. This is the period between negotiation and close of sale.

For example, let’s take the scenario where you’ve negotiated hard but can’t get the other person to cross the line. So you decide to ‘split the difference’. But this may not always work.

There’s a famous example of two sisters arguing over one orange left in the fruit bowl. They can’t decide who should have it.  So after a bit of a haggle, they decide to cut the orange in half and share it.  Sounds like a good deal?

Well, afterwards it transpires one sister needed the peel of one orange as part of a cake recipe and the other needed the juice of a whole orange to make a drink!

The point here is that what’s often referred to as ‘positioning negotiation’ can often leave both parties with a less than satisfactory outcome.

When you try to split the difference, the customer or client you’re dealing with may not always agree with you – but since you’ve just offered to give away half your negotiating room, they’ll take your offer as their starting point when they make their counter-offer.

So if you end up reaching agreement from there, you’ll be much closer to their position than your own.

How you choose to bargain is of course up to you. It’s one of those areas in negotiation where you have a choice and there’s no right or wrong way of doing it.

In my next two blogs, I want to share some thoughts as to how to improve your bargaining skills and improve your strike rate at closing a deal based on the research I did for my latest book, The Art of Influencing and Selling.

Top Tip #1: Always keep something up your sleeve to improve your bargaining position!

This is a sensible bargaining position to hold. It will allow you to ‘give and take’ with the customer or client that you’re in negotiation with and makes it easier for you to give away something in return for getting them agreeing to do the deal.

If you negotiate and agree everything point by point as you go along, what tends to happen is that you end up leaving difficult points until last.

At that stage you may find you’ve nothing left to bargain with as all the concessions you feel able to have made would’ve been given away earlier in order to settle the easier negotiating points.

This doesn’t mean you shouldn’t agree anything until you get to the sticking points as quick agreements on some easier points in the early stages of bargaining can create a positive feeling of momentum in your negotiation.

However, if you leave the door open to negotiating some of the easier points you can then create a position where ‘if you agree points (a) and (b) then I’ll agree points (c) and (d)’ and this will help you achieve a better bargain than ‘splitting the difference’ ever could.

Top Tip #2: Offer concessions of decreasing size as you continue to bargain

If you’re trying to close the deal but there’s a massive gap to bridge, offering tiny concessions early on can make you look like you’re not interested to do the deal, which will weaken your bargaining position.

Think about making a series of smaller (not tiny) concessions as you go along in the bargaining process as this will in fact increase pressure on the customer or client to move their position or come up with alternatives of their own. Taking this approach allows you to manage your stockpile of concessions so that you don’t run out.

Top Tip #3: Remember to take time out when pushing for a bargain

It doesn’t matter how long you take a break for – 20 minutes to a day or two – of course it depends on the size and importance of the deal you want to reach with the customer or client. The important thing is that breaks can help reduce any anxiety that may be felt on either side and also give you a chance to recharge your batteries.

There may be occasions where there’s a deadline involved for a customer or client decision to be made within a timeframe – but don’t be tempted to hard bargain all the way through to that deadline – suggest taking a break and returning to the table where you feel a short time for reflection will actually pay dividends in helping to get the deal done. Remember, it works both ways so it’s good for you and for the customer or client, particularly where it’s for a major marketing project.

Expert negotiators often use this tactic but also try to allocate responsibility to one party to come back to the table with a new proposal as to the way forward.

If you don’t make this explicit, you could find yourself in the situation where both parties return to the table expecting the other to have come up with a breakthrough idea!

Top Tip #4: Think carefully before giving away something for nothing as a bargaining tactic

Giving away something for nothing is a bit like an inducement to agree to the deal – but be careful here as you could find the customer or client simply pockets the concession and doesn’t feel inclined to reciprocate, as its human nature for them to feel they deserve whatever benefit you confer on them when bargaining to strike the deal.

A small concession may elicit a feeling of goodwill but they don’t necessarily spark a reciprocal concession. If you feel you want to make a concession, then make it specifically part of the bargain. People will understand the principle of reciprocity applying explicitly as in ‘if you give this to me then I will give that to you.’

Top Tip #5: Lead with conditions, not concessions, when trying to strike a bargain

When bargaining, state your conditions first and then your concessions, not the other way round, otherwise customers or clients won’t listen to what you want. So, from a marketing perspective, if you want to give something away and get something back in return, it’s worth the way to say it is ‘if you do this for me, I’ll do this for you.’

For more info and Part 2 click here.

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