Avoid Intransigence

The easy way out is an offer or price from which we refuse to budge. It removes the indecision. It removes the risk of causing offence. It removes the risk of getting it wrong.

However, we should always expect a competent business person to offer less than we ask for. Putting it another way, it is very rare in my experience for a potential customer to say, 'This is fantastic, please let me pay more than you are asking.'

I have four children and I know that negotiation is a natural part of their behaviour. As they grew up we would often give extra chores, for which they would get an increase in pocket money. I remember one turning point in Joshua's business development. On one occasion he came back and said, 'This £1 is not enough for the extra work.' The trouble was that we had become dependent on his work. And he was doing a very good job. Now I could have been intransigent and made a decision from which I refused to budge. But if I had done that, what would the outcome have been? Think it through with me - I would have lost Joshua's willing cooperation. So negotiation was inevitable.

Over many years I have been responsible for purchasing cars appropriate to our image in the market. Two makes suited our requirements: Volvo and BMW. For years BMW dealers would take a stance of intransigence from which they would not shift. In other words, they would not negotiate. In every case I bought Volvo because BMW would not negotiate on price, service or extras. Last year BMW did begin to negotiate and they got my business for the first time in seven years; they could have had it much sooner by avoiding intransigence.

One of my friends is currently finance director for a major international distribution company. They conducted a sales presentation, which they won, for distribution services with a national chain. Before the contract was ratified the national chain was subject to a take-over and the new parent simply renewed the contract with the existing supplier.

The following year both companies were pitched against each other. My friend's company was in many ways the better choice and probably the preferred supplier. They were asked to review their set-up costs. These included items such as training and software implementation - fairly soft costs. But company policy was essentially intransigent. They simply would not budge on those costs. The other supplier offered them totally free and got the business.

To the casual observer it may appear that price was the issue. The reality was that intransigence was the issue. When my friend evaluated the cost of the set-up compared with the net profit over even the first year the difference was minuscule.

My friend put it this way: 'Being obsessed with short-term profitability led us to miss the whole deal. It stopped us from seeing the supplier's point of view and wasted enormous amounts of time spent in preparation and presentation.' Intransigence may remove some uncertainty. But it will always cost us.