How to avoid the last-minute nibble and get a better deal
Very often, towards the end of a negotiation, a buyer will ask for a concession: a price reduction of say 5%. In our experience, the salesperson will often say “Yes”, to get the deal. Why? Because the deal is so near, there has been so much time, effort and emotion invested in getting so close, and because salespeople are motivated by sales (and not necessarily by profit). Buyers on the other hand are motivated by savings; they know the mind of the salesperson and so they pop the question right at the end. In fact, there are four different responses to the buyer’s request:
- Panic: but you won’t do this if you are well prepared, will you?
- Say “Yes”: but you may be too soft and give something away for free
- Say “No”: but you may be too hard and miss the opportunity for mutual gain
- Trade: it may be best to trade: “If you do this for me, I will do this for you”
If you’re well prepared – you know the stakes, know the issues, know the other party, know your bottom-line and know your alternatives – then you needn’t panic! Knowing what you do about buyers, you might even have expected this last-minute request. You’re not going to panic, so you can think about whether you want to say “Yes”, say “No” or try to Trade.
There is no right or wrong here and what you do depends on lots of things.
You could: Say “Yes” to get the deal, contribute towards your bonus and take out uncertainty. You’d stuffed the bid high in anticipation of this anyway!
Say “No” because you’re at your bottom line, or because you believe the buyer has nowhere else to go. In this case, you’re probably best to try to sweeten the pill by reminding the buyer of the advantages of the deal, stressing what you have already conceded and so on; nobody likes to have their polite request refused, and the buyer needs some way out.
Offer a trade: “If you will accept one delivery per week instead of two, we can reduce our prices by 3%”. Negotiation is a trading game, and this approach opens the way up for a gain for both parties. So, as the Hitchhiker’s Guide to the Galaxy so wisely says on its front cover: “Don’t Panic”. Instead, just get on: answer the question in the best way you can, and get a better deal!