Do you have a process? If you think about it, the things you do successfully every day have some rhyme or reason. Even improv comedy performers, whose art relies on making things up on the spot, have a system they utilize to make these performances funny.
Well, strategic negotiators have a system in place, too. They have a system that will take advantage of your lack of process and a general desire to be helpful and get a deal closed. But it does not have to be this way. We will examine two standard techniques great negotiators use and determine how to defend against them with your own process.
Fait Accompli
This is defined as presenting something as the only option, and your only choice is to accept it.
The prospect says, "Your proposal is comprehensive, but based on our internal discussions, we need net-60 payment terms and a 10% discount off the proposed price. Please amend your proposal and send it over, and I'll have it signed by the end of the day."
Strategic negotiators will try to give the terms of your agreement like a mandate. But you are not a starving beggar, and they are not the king. Here's how you deal with this gambit.
Step 1: ARA (Acknowledge, Reassure, Ask)
- Acknowledge: "I understand this is an important project for your company."
- Reassure: "We want to provide a lot of value and we've co-created this deliverable to ensure we solve the issues you shared with us."
- Ask: "We wouldn't want to have to hold up this project, so is your timeframe still important to have this implemented and completed by June 1st?
Step 2: Struggle and Redirect
Now, we will use a tactic to steer the conversation where we want to go. That could sound like:
"Obviously, what you proposed is interesting and not something we've ever done before. I'm curious, is there something we should know about that concerns you about our ability to deliver on this project?"
Step 3: Concessions (Give to Get)
Now, at this stage, we are willing to play ball. But it must be something for something, not something for nothing. That could sound like:
"It sounds like you want to keep all the deliverables in the solution. Would it be helpful for me to throw in five extra seats/units/licenses in my deliveralbes this year and keep the investment the same?"
The move here is to "add" something instead of taking something away. Nobody wants an inferior service or product or less than what the original scope would be. It's like the car dealer saying yes, I can take $7000 off the price. Which two tires don't you want? The key here is called "Pie" negotiations, which means make a larger pie, and we all get more! Personally, I like apple pie!
Hot Potato
A good rule to remember in negotiating is never to answer an unasked question.
"We only have 80% of the budget available that we originally discussed."
Keep the problem squarely where it belongs, in the other person's hands. You may love helping people; I love helping, too, but this tactic is designed to get you to do more than you should for less.
We will listen to your prospect's problem and then gracefully toss it back.
Step 1: ARA (Acknowledge, Reassure, Ask)
- Acknowledge: "Gosh, I'm sorry to hear that."
- Reassure: "Budgets change all the time, so I can understand it being different now."
- Ask: "How are you going to find the other 20%?"
The key here is to be quiet and let them say something interesting! They will likely imply you should lower your price and deliver the same things, which is unacceptable.
Step 2: Struggle and Redirect
"Unfortunately, I don't have that 20% to give, and if I did, you wouldn't want to do business with me as that would not be ethical for me to do. I understand if this is where we end it. However, when this has happened in other situations, folks have been able to recapture that by taking it from another project or working with another department. Do you think those make sense here?"
Step 3: Concessions (Give to Get)
"We have a couple of options. First, if we can't change the proposal, we go our separate ways. Or we can go ahead and create a Phase 1 and Phase 2 approach. Phase 1 covers the budget you have now, and Phase 2 captures budget from your next fiscal year. Would it make sense to work through this idea?"
You can change the wording to fit your personality, situation, and prospect, but the heart of the issue is the same. Watch your tone and delivery, but don't make it a problem you solve. You must ensure it remains a "them" problem.
Techniques Make A Difference
There will come a time when you see these techniques being used, and you will either have practiced using these defenses and protected your mindset so you could execute them well, or you won't. For your sake, I hope you take the time to understand the common negotiation tactics and how to defend against them. If not, you'll find yourself doing more for less.
When you acknowledge the situation, reassure the other party of your intentions, ask the right questions, struggle appropriately, and redirect the conversation, you can navigate these challenges gracefully while protecting your margins.
If you want to learn more about other tactics great negotiators use and how to defend against them, check out my book 'Negotiating from the Inside Out.' If you need help improving, our firm would love to guide you through.
Clint Babcock
Clint has nearly 25 years of experience developing and directing organizations' recruiting and sales strategies, as well as coaching and mentoring "C-level" executives. His expertise is in training inside and outside consultative sales teams in new business development, profit and loss management, sales compensation, key account management, and product/service positioning. Specialties include corporate sales training, public speaking, hiring assessments, and business development structuring.
