Negotiator Differences in the Seller - Buyer Ploy (Part 1 of 2)

Observing how some negotiators manage their negotiations can be a fascinating exercise. Before you start to read the following information, it is imperative to remind you that any method of persuasion that you use in a negotiation should be done so with integrity. It should never be use for your own personal gain or at the expense of others.

All forms of persuasion and influence should be used ethically. The application of these methods should form something of mutual value in any interaction.

1. The Nibble

This is one of the most popular techniques employed by sales people. Right after they complete a sale, they tack on additional cost items, e.g.

Sales person: "So with all the features the price comes to $ 19 59?"

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

Sales person: "Now of course we also have to add on delivery at $50 and an installation fee of $100."

Most individuals become more relaxed after they have made the purchase. For this reason the sales person has a much greater opportunity to attach add-ons (children are masters at this play). Just consider the car sales person who recommends that a sun roof, alloy wheels etc. might be included for a only a few extra pounds per month after you've decided to purchase the car.

The client can offset this ploy by replying 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: "Actually it doesn't, but I suppose we could arrange it."

The client is briefly empowered because the sales person is also psychologically at his weakest directly after the deal is struck and because they do not wish to see his hard work unravel. By nibbling you have the opportunity to capitalize on an advantage after the basic agreement is concluded.

On the other hand, the sales person could have countered the client's ploy by responding with :"Come on, you have got yourself a really terrific bargain. Be fair please."

The client could then respond with: "Well I suppose we start from scratch all over again, so do we?" This "tit-for-tat" manner of negotiations is often unnerving for people because they don't want the bother when they want to purchase something. Most people simply prefer to buy the product in good faith, despite the "ploys" utilised by salespeople.

2. The Flinch

Client: "How much did you say !! $ 2950! That's really expensive." In this scenario, the client behaves as if they haven't heard the price correctly, but this will set a new benchmark on the basis of the bargaining to follow.

The salesperson frequently follows this up with a concession.

Sales person: "Of course, the price also includes delivery and installation."

Client: "That's still a great deal of money!"

Sales person: "We might be able to to include some extra software."

If you don't immediately flinch, the sales person is going to conclude that you are still above your real base. Also, if you don't flinch after agreeing to an offer than you might miss an opportunity to do even better. Similarly, the salesperson might also come to the conclusion that maybe they also could have done better.

3. Deferring to higher authority

Client:" I am not at all pleased with the repair fee. It is way too expensive for the amount of work done. I refuse to pay this much."

Engineer:" I 'm only an employee here. If you don't pay, then we can't release your machine to you. I have no authority to change the costs."

This is a nifty deferral to higher authority. How can you respond in this situation?

Client: "Then, who does have the authority ?"

The engineer could counter this question by replying: " The directors in our Belgian office." The only possible means to counter this ploy is to ensure that you get the names for all the decision makers during your information gathering phase.

4. Good Guy, Bad guy

In this situation, we have a sales person and a property owner negotiating with a prospective buyer.

Owner: "I am sorry, but I don't want to waste any more of my time on this. I have to leave. I just don't believe you've made a serious offer. See you."

Sales person: "I must apologise. He is a difficult man. I really wish to see you get the house. Let me see what I can do."

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

This position can become difficult and risky. It can lead to the possibility that the sales person may end up negotiating with the owner on behalf of the buyer. You can immediately counter this ploy by telling the sales person that you know what you are doing. When you recognize a ploy for what it really is, then it won't work.

5. The set aside

Suppose you find yourself meeting with the purchasing manager who is talking to the representative of a printer.

Manager: "Look, we only do business with companies that give us sixty days' terms. If you can't meet this stipulation, then why should we waste our time?"

The threat faced by the salesperson is that the negotiation is on the verge of collapsing before all the facts have become known and before the possibility of building a relationship. A less experienced negotiator will either make a concession or permit the negotiation to collapse.

The experienced negotiator will reply with: "Let's put that aside for a moment and first see if there are other things important to both of us?" At the same time, it is also a good idea to use a gesture to symbolically indicate that you put it at the edge of the table or on the floor.

6. The hot potato

How do negotiators pass hot potatoes?

Buyer: "I only have a limited budget of $250 000." Or "But the problem I have .." The ownership of this problem is passed on to the other party.

A skilled negotiator will respond with: "Fine. I, understand perfectly., So if I locate a property that meets your needs and is slightly higher than this amount, do you still want me to show it to you or should I just go ahead and offer it to other buyers?" This an excellent way to test the validity of the buyer's statement. The buyer is now forced to own the problem.

7. Splitting the difference

Another tactic employed is to get the other party to suggest that you split the difference. How?

Buyer: "You want $10 000 for this car but I can only pay a maximum of $9 000. It's unfortunate 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. I suggest that we split the difference"

Buyer: "You mean that we can agree on $9 500? Sounds fine to me, but I will have to consult my wife. May I use your phone?"

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

Seller: "How about we do this - let's split the $500. Will she accept?"

Buyer: "So you the price you're proposing is $9 250?"

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

The technique applied in this scenario is that the seller ends up splitting his side twice, and the result is that the buyer only has to pay 25% of the difference.

In the next edition of the Negotiation Times we will be examine some more tricks of the trade...

[ Part I ] [ Part II ]