What Ifs

What if we treble our requirement? What if we could give a two-year agreement? As soon as our opponents use phrases like this, they are able to discover any slack in our price or in our approach and they will negotiate from it.

I travel a great deal in the Third World and love to sharpen my skills in street market negotiation. The principles are just the same. You can try them in your local antique shop. Having browsed around and shown a general interest, point to two items and say, 'I'm interested in your best price, what if I take both?' The answer comes back: 'One thousand pounds.' Point to the one you don't want and say, 'How much just for that one?' He says, 'Six hundred.' You say, 'Fine, I'll have the other one for £400.' You have established some slack, and created room for negotiation.

My eldest son and I are negotiating to buy shotgun cartridges. We ask one dealer, 'How much if we buy them by the box?' and he replies, 'Fifteen pence each.' We say, 'what if we buy 1,000?' He replies, 'Twelve pence each.' We then ask, 'How many do you have in stock?' He replies, 'Twenty thousand.' We say, 'What if we buy half your stock?' He says, 'Ten pence each.'

As the buyers, we have now established significant slack in what he charges. One thing is for certain: whatever price we get, we won't be paying 15p each. Any time you use this tactic as a buyer, you will of course discover slack in the price and you should negotiate from it. If you are the seller experiencing this tactic, then as a general rule don't shoot from the hip. Buy time and get back the control by asking 'W' questions. Ask about their application; identify any problems or constraints or obstacles that they may be encountering. Check on their time constraints; ask what it is that they are most concerned with. Ask about safety, cost savings in fuel efficiency, whatever you can ask. Ask what difficulties they have experienced with previous supply. Most importantly, ask what their usage is. A good way to do that is to ask in the past tense, such as 'What was your monthly consumption last year?'

From time to time, our counterpart will ask for a price breakdown. If they do, we may have to give it to them, but we should never be pressurised into pricing on the spot. We should come back with a price after we have carefully thought through the implications. Price things they can do low. Things that only we can do, price high. Don't be bound by tramlines of method that you have used in the past. But also be willing to stick by your revealed pricing method if they want to adjust their total requirement.

I priced a marketing audit for a prospect. In my price I included a sum for both myself and one of my senior clinicians to do the brief together and to write the plan jointly. The same senior clinician was included in the price to provide helpline duties for 90 days. He also conducts telesales coaching immediately after the plan is presented.

The prospect understandably asked me to consider doing the audit alone, bringing in the senior clinician for the telesales work only. Because his rate is significantly lower than mine, I was able to demonstrate that taking him out of the briefing session would save a minuscule amount, for two reasons. First, he would now have to conduct a briefing session of his own for the telesales coaching. Second, the helpline content would dramatically increase in price because I would have to take that responsibility. The saving for the prospect was a few hundred pounds and the loss of input would far outweigh the minimal saving available. The prospect saw it immediately.