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SalesVantage.com >> Article Archives >> Negotiating >> Negotiating The Final Trade

Negotiating
   
Negotiating The Final Trade
By Linda Richardson, CEO, Richardson

Almost everyone has done it - and regretted it.  At the end of a hard (or not so hard) negotiation when the negotiation is 99% there, many of us have made an unwarranted and costly concession.
Published:    Fri Aug 25, 2006
Last revised: Sat Feb 3, 2007
Almost everyone has done it - and regretted it.  At the end of a hard (or not so hard) negotiation when the negotiation is 99% there, many of us have made an unwarranted and costly concession.  It is at the conclusion of a negotiation that some clients ask for one more concession.  Sometimes it is seemingly small and sometimes it is approached as something assumed to have already been included in the deal.  Occasionally it is a major point (sign of a true adversarial).  A combination of relief and euphoria that accompanies a deal that is almost done, the eagerness to close the deal, and/or the desire to show you are accommodating, often causes many negotiators to make the costly mistake of GIVING that final concession.  

It is possible that the last demand is innocent.  It is also possible that it is something you can give without negative impact to your profitability.  It can also be a concession you want to make "for the relationship".  But more often than not the final demand is a danger zone in which the concession can be a costly mistake that can erode your profitability.

Regardless of the circumstances or client motivation, before you agree to the final concession make sure you fully understand the cost to you for this and future deals.  Also even if it is an easy, no- or low-cost concession that you want to make, don't squander it.  If it is doable without negative impact to you, at least get relationship credit in how you make the concession to show it has value.  But always specifically figure out what the cost will be before you concede.

Before you make the concession:
  • Pause and think about it.
  • Jot it down - this will slow you down.
  • Figure out exactly what it will cost you, i.e. 1/4 % may seem low, but when you figure out what it will cost, it can turn a win-win into a win-lose or a not so attractive deal.  To weigh what it will cost, calculate what it means in dollars, cents, time, resources, and impact.  You may be surprised.
  • Consider the concessions you have made already.
    - Have you made more concessions than the other party?
  • Avoid easy answers like, "Just split the difference."  Maybe 22% not 50% is appropriate.
  • Figure out what you can trade.  Because the client has reopened, you can exchange the concession for something you'd like to get.
  • Whether you trade or decide to give, do so in a way that shows it has value.  (Don't say, "Okay, no problem.")
  • Ask questions - why, how important is it.  If it is important, you can trade for it.
  • If it is something significant, offer to re-work the numbers to include it.
  • Trade or change the deal (the old motto:  change the price; change the deal).
  • Stay consultative.


Linda Richardson, founder and CEO, of Richardson a global sales training company, author of nine best selling sales books, and faculty member at the Wharton School, is the driving force behind the Richardson sales curriculum. visit www.richardson.com or call 215.940.9255.

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