Negotiation Tips, Ploys and Techniques (Part I of II)

It is always interesting to take a look at some of the negotiation tactics used by sales people (or sometimes by the customer who does his homework) and see the results. Before reading through some of the negotiating tips and techniques that follow, it is important to note that it is regarded as of the outmost importance to use all methods of persuasion honestly and not with the sole purpose of benefiting yourself at the cost of others. The use of these tips and ploys should create something of value to both sides in any interaction.

Negotiation Tips and Tricks

1. The Nibble Technique

This is one of the  favourite negotiation tips used by sales people. Immediately, when a deal is concluded, they add additional cost items, e.g.

Sales person: "So with all the features the price is £ 19 59?"

Customer: "That's very good. It's better than I thought."

Sales person: "Naturally, we need to add delivery at £50 and an installation fee of £100."

Because people become less stressed once a deal is made, the sales person has an excellent chance of succeeding with add-ons (kids are masters at this play). Think of a car sales person who, after the decision is made to buy the car, suggests that a sun roof, alloy wheels etc. could be added for a few extra pounds per month.

The customer can counter this tactic by responding to the sales person's initial statement with: "Thanks, I'll take it. Of course this includes delivery and installation, does it not?"

Sales person: "Well no, it doesn't, but I suppose we could arrange it."

The customer has a moment of power and can come with some of his negotiation tips and tricks because the sales person is psychologically at his weakest directly after the deal is made, as he does not wish to see his hard work undone. By nibbling you can get a little more after the basic deal is clinched.

To counter the customer ploy, the salesman could have put his sales skills at better use and responded with: "Come on, you have got yourself a great deal. Be fair please."

To this the customer could then have responded: "Well I suppose we start all over again, do we?" This "tit-for-tat" style of negotiating often make people uncomfortable, as they do not want any hassles when they want something and just simply buy the product in good faith, regardless of the tricks, tips or ploys that salespeople may be using.

2. The Flinch

Customer: "What! How much!! £ 2950! That's a lot of money." This is one of the negotiation tips working for the buyer. Here the customer acts as if he has not heard the price correctly, but a new benchmark is set that will now act as the basis of the negotiating to follow.

A concession typically follows from the sales person.

Sales person: "That naturally includes delivery and installation"

Customer: "It is still a lot of money!"

Sales person: "We could possibly arrange for some cowoking software to be included."

Should you not flinch when a low offer is made, the other party will conclude that you are still above your real base. By accepting an offer without flinching and negotiating you may miss an opportunity to do better. Although the other party may feel they have done well, they will not feel as good as they could possibly feel, as they will have a suspicion that they could have done better.

3. Deferring to Higher Authority

Customer:" I'm not happy with the repair fee. It is far too high for the amount of work done. I refuse to pay this much.

Engineer:" I just work here. If you don't pay, you cannot have your machine. I have no authority to change the costs."

A neat deferral to higher authority. What can you do?

Customer: "Who can?"

The engineer could counter by responding: " The directors in our Belgian office." The only way to counter this tactical ploy is to ensure that you probe for all decision makers during your information gathering phase.

4. Good Guy, Bad Guy

Here's one of the tips used by the sellers as a team. A sales person and the owner of a property are negotiating with a prospective buyer.

Owner: "I am sorry, but I don't want to waste more time on this. I have to go. I just don't think a meaningful offer is at hand. See you."

Sales person: "I must apologise. He is a difficult man. If it were my wish I would like to see you get the house. I'll see what I can do."

Buyer: "Do you think you can convince him to do the deal?"

Difficult and dangerous. The buyer may end up asking the sales person to negotiate on his behalf with the owner. The best way to counter is to simply tell the other party that you know what they are doing. A ploy perceived is not a ploy that works.

5. Set Aside

You are in a meeting where the purchasing manager is talking to the representative of a printer.

Manager: "Look, we only do business with companies that give us sixty days terms. If you cannot, why are we wasting our time?"

The sales person is in danger that the negotiation will collapse before it has begun, before a relationship is built, before all the facts are out in the open. An inexperienced negotiator will either now give a concession or allow the negotiation to collapse.

Now, some negotiation tips work better than others but in the end the success lies in the skill used to apply them. A skilled sales person will respond by saying: "Let's put that aside for a moment and first see if there are other things important to both of us?" While saying this, it is also helpful to gesture the putting aside of this issue for a time by making as if you put it at the edge of the table or on the floor.

6. Hot Potato Technique

How do negotiators pass hot potatoes?

Buyer: "I only have a budget of £250 000." Or "But the problem I have ..." Ownership of the problem is given to the other party.

A skilled negotiator will respond with: "Good, understand, so if I find a property that meets your needs and is just beyond this amount, must I still show you or offer it to other buyers?" This is one of the "tips of the trade" that would test the validity of the buyer's statement. The buyer is forced to own the problem.

7. Splitting the Difference

Get the other party to suggest that you split the difference. What tips to use?

Buyer: "You want £10 000 for this car while I only have a budget of £9 000. It's a shame that we cannot do business with only £1 000 separating us. Is there anything we can do?"

Seller: "I really would like to sell it to you. Why don't we split the difference?"

Buyer: "How do you mean? Are you saying that we can agree on £9 500? Sounds fair to me, but I will have to consult my wife. May I use your phone?"

After consulting his wife, the buyer says: "I tried. What a pity. It's a shame... we are only £500 apart!" The £1 000 is now forgotten.

Seller: "I tell you what, let's split the £500. Will she accept?"

Buyer: "So you are saying £9 250?"

Seller: "Yes, why not? Can you get her to accept it?"

The dilemma presented by this negotiation tactic is that the seller ends up splitting his side twice, causing the buyer to pay only 25% of the difference. In the next edition of the Negotiation Times Newsletter we will be looking at some more negotiation tips...

[ Negotiation Tips... - Part I ] [ Negotiation Tips... - Part II ]