Our negotiation system relies on making effective decisions, and often that means saying “No”. “No” is effective because it provides clarity. Likewise, we get clarity from our opponent when they say, “No, we can’t accept that.” But sometimes things aren’t that clear.
Let’s examine some classic statements to see if your opponent is really saying “No.” Your company, SimCo., has recently presented a €1,000,000 proposal to a new customer, BigTech. BigTech has indicated there’s plenty more business ahead once the partnership is started.
Select all the statements below by BigTech that indicate they have clearly rejected your price:
Well, none of these statements is a clear “No.” These are all statements that push you in different ways to make compromises and lower your price. Reading a simple “No” in these statements can be costly and unnecessary First let’s examine what BigTech communicates in the first three statements.
This is not a rejection, but a statement of preference. The preference is dressed with some emotion to make you feel as though you offended your customer. Your customer wants you to think about the relationship where surprise is unwelcome and doing better is rewarded.
An effective response is to reverse and mirror by asking,
“Surprised?”
Pause. Listen. Let your opponent explain their surprise and allow the negotiation to continue.
This is not a rejection, but a stronger indication of lower price preference because it includes a thinly veiled threat: If you don’t lower your price, the next meeting will be canceled or delayed and it will be your fault.
An effective way to defang a bully is to ask them to explain and then test their decision with this:
This is not a rejection of your price, but a technique to get you to disclose your internal costs. Once you disclose your internal costs, your opponent will eventually demand that your cost become their price (with a smidgen of margin to keep you in business supplying them). They will promise to help you lower your costs, having you believe those cost savings will accrue to SimCo. Hint: this story always ends with the cost savings accruing to BigTech.
Never provide internal costs and treat them like all other proprietary confidential information. An effective response is to refocus BigTech on your mission with a sequence like this:
Are you interested in the examination of the other two statements and the conclusion? Wait for part 2. And if you want to learn even more about negotiation register for the seminar Systematic decision-based negotiation.