FOOL'S EYE VIEW
Only Buy When The Price Is Right

By David Kuo (TMFDragon)
October 11, 2001

Carburton Street, London -- One of the most difficult decisions to take in any negotiation is to walk away if the deal on the table is unacceptable. But of course, the balance of power in any negotiation is seldom equitable. And it is this unequal balance of the seller's need to clinch the sale and the buyer's desire to secure the purchase that will inevitably tip the scale one direction or the other.

In a recent article showing how to Negotiate Your Way to Greater Wealth, we looked at the five-point plan for negotiating successfully. SMART negotiators will remember the need to be Specific about their requirements and to research the Market carefully. They'll also Appreciate what is on offer and commence negotiations only when Ready, while always trying to Trade, rather than concede, on price. When all else fails, SMART negotiators just walk away because there is no such thing as a must-have deal.

But negotiating is more than just getting your own way all the time -- that's just being silly. Negotiating is about finding a compromise solution that will be acceptable to both parties; in other words, a "win-win" situation for both sides. A good negotiator will therefore try to ensure that a deal is kept alive for as long as possible until that win-win condition can be satisfied.

So let us consider the purchase of a new television set as an example. You've done all the background research and have a pretty good idea of what is available on the market. You have also identified the particular model that you want -- the all-singing, all-dancing Bony Brilliantron Plus-Plus. The price is a lofty £400 but you are not prepared to pay any more than £360.

Armed with all this information you saunter into your local electrical retailer, Con-it. You make your way over to the racks of television sets that are on display and Con-it's supersalesman, Slippery Sid, greets you warmly. Now Sid has an agenda, namely to sell -- that is his job. He's not going to be happy until he gets you to buy something. That is his weakness. But remember, he is also equipped with all the closing tactics in the game. Now closing tactics are well-rehearsed, well-practiced lines and phrases that are designed specifically to get you to buy. Slippery Sid knows that a sale is not accomplished until the goods are paid for. But your remit as a buyer is to resist that close for as long as possible.

Classic closing tactics might include some of the following:

The forceful close: "Will you be paying by cash or credit card?" 

The implied close: "Will there be anything else apart from the television set?"

The pushy close: "Let me take this over to the cashier for you."

The subtle close: " We deliver on Tuesdays and Thursdays in your area, which is more convenient?" 

But remember, if you aren't quite ready to buy, then just brush aside the close and say you haven't made your mind up yet. The longer the negotiating game goes on, the more concessions Slippery Sid is likely to make to close the sale.

So, Slippery Sid gets the ball rolling by asking what type of television you are looking at. Be specific and ask to hear about the Bony Brilliantron Plus -- and not the Plus-Plus, which is what you are really after. Sid will tell you very little that you don't already know, but play along all the same. However, be ready for the switch. This is where Sid will test the waters by suggesting the more expensive model, the Bony Brilliantron Plus-Plus.

Once Sid is all talked-out, move in for the close first. This will put Sid at a huge disadvantage. And your opening line should go something like, "OK, the Plus-Plus sounds good -- but what's the special deal today." Sid will tell you that the price is already heavily discounted, but don't believe a word of it! Bamboozle him with volume discounts and that the more television sets he sells, then the greater Con-it's discount is from the manufacturers. This will normally extract a token 5% discount. But while this is good, it is not quite good enough. You are looking for at least a 10% discount to achieve your price target of £360.

Tell Sid he has to do a lot better to close the sale today. Counter-offer with a 20% discount and also ask for an extended one-year warranty -- plus a set of infrared headphones too -- if he wants the deal to be done immediately. If Sid was prepared to move with an initial 5% discount, then another 5% shouldn't be that unreasonable. His second counter-offer will quite likely be that 10% discount, but without the headphones and no extended warranty.

So that's it in a nutshell. Prepare well before you enter into any negotiation, and plan your negotiation to ensure that both parties win. In the example of the television set, you win because you get your television set for £360, while Sid also wins because he's upgraded his sale from the Plus to the Plus-Plus.

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