Episode #8 of the course Negotiation skills by Chris Croft
We’re almost there now—we have reached the last stage of the negotiation process: the close. This is when you think you’re nearly there, but if you’re not careful, the whole thing can slip away from you and all your great progress can be undone.
There are just three things to look out for.
First is the phrase, “Final Offer.” Ideally, you wouldn’t say this, and neither would anyone else; I’ll explain why. If you say, “And that’s my final offer,” you have just cut off any room to maneuver—and if you then DO give them a bit more, you’re admitting that when you talk about “final offers,” you don’t mean it. And if you ask THEM if it’s their final offer, they pretty much have to say yes, don’t they? Now you’ve made them dig in, and you’ve made it much harder to get them to give you any more! So, never use the phrase “final offer,” either as a statement or a question.
But what if they (foolishly) ask you, “Is that your final offer?” The best answer is, “With the deal as it stands, yes” (because with different tradables, there are still ways to move).
Split the Difference?
The second phrase that comes up a lot in the final stages is: “Split the difference?” Again, never use it, because it’s a weak phrase. If someone asks to “split the difference,” they are basically saying, “I’ve already given up, but I’m just trying for one more little bit.” If you say, “No, I just can’t, I’m afraid; this really is as far as I can go,” they’ll say, “Oh, all right then,” and agree to your position. So, don’t say it, and if they say it, the answer is, “No.”
And your backup position—in the unlikely event of you saying no and them saying, “Right, well, in that case, the whole deal is off!”—is to split the difference of the difference. So, you would say something like, “Well, it would be a shame if the whole deal fell through when we’re so nearly there. Hmm, let me think. You wanted 100 and I can only afford 90, and you’re offering to split the difference at 95. I just can’t afford that, but how about 92 …?”
So, if you were buying, you’d split the difference between their 95 and your 90 and say 92. If you were selling, you’d split the difference between their 95 and your 100 and say 98.
The third thing to look out for at the close is The Nibble. Personally, I would never use the Nibble; I think it’s dishonest and it risks upsetting suppliers or customers. But it’s pretty common and can be quite effective, so you need to look out for it.
The Nibble is when you agree to the deal, you shake hands, and then they try to add on or take something else off AFTER you’ve agreed! If they were selling, they might say, “Oh, I nearly forgot, delivery is extra,” or if they were buying, they might say, “By the way, you don’t mind if we take the magnolia tree from the front yard when we move out, do you?”
It’s SO tempting to agree to the nibble; it’s such a small thing compared to the price of the whole house … but hang on, they are suddenly taking maybe $100 of your money AFTER you’ve agreed to the deal. It’s dishonest and you can’t allow it.
The answer is to say, “I’m sorry, but that wasn’t in the agreement we just made. I’ll have to replace that magnolia, so if you want to take off $100 off the price of the house—it’s only $100 on $500,000—then I could do that?” Make THEM appear petty! And in my delivery example, the reply would be something like, “Oh no, I assumed delivery was included. If it’s an extra cost, then I’d need a cheaper price for the sofa.” Don’t let nibblers get away with it!
That’s Lesson 8. we’ve only got two more to go now, but they ARE very important ones. Tomorrow, I’ll bring you information about how to overcome your fears and negotiate when you might often decide not to.
Bye for now!
The Personal MBA: Master the Art of Business by Josh Kaufman
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