NEVER SAY YES TO THE FIRST OFFER
The reason you should never say yes to the first offer (or counter offer) is that it automatically triggers two thoughts in the other person’s mind. Let’s say you are planning to buy a second car. The locals have one for sale and they are asking $ 10,000. It’s such an incredible price for the perfect car for you that you can’t wait to go and grab it before someone else gets there. Along the way, you start to think that it would be a mistake to offer them what they ask for, so you decide to make a very low offer of $ 8,000 just to see their reaction. You show up to their house, examine the car, take a short test drive, then say to the owners, âThat’s not what I’m looking for, but I’ll give you $ 8,000. “
You wait for them to explode with rage at such a low offer, but what really happens is the husband looks at the wife and says, âWhat do you think, my dear? “
The woman said, “Let’s go and get rid of it.”
Does this exchange make you jump for joy? Does that leave you thinking, âWow, I can’t believe what deal I got. I couldn’t have had it for a dime less â?
I don’t think so, you are probably thinking, âI could have done better. Something is wrong. Now consider a more sophisticated example and put ourselves in the other person’s shoes for a moment. Let’s say you are a buyer for an aircraft engine manufacturer and you are about to meet a salesperson who represents the engine bearing manufacturer, which is essential for you.
Your regular supplier has let you down and you need to make an emergency purchase from this new company. It’s the only company that can deliver what you need within 30 days to avoid an assembly line shutdown. If you cannot supply the engines on time, it will void your contract with the aircraft manufacturer, which supplies 85% of your business.
Under these circumstances, the price of the bearings you need is definitely not a priority. However, when your secretary announces the arrival of the salesperson, you say to yourself: âI will be a good negotiator. Just to see what happens, I’m going to give him a really low offer.
The seller makes his presentation and assures you that he can ship on time to your specifications. He offers you a price of $ 250 each for the bearings. This surprises you because you paid them $ 275. You manage to hide your surprise and answer: “We have been
pay only $ 175 â(in business we call that a lie, and it’s done all the time), to which the salesperson replies,â Okay. We can match that.
At this point you almost certainly have two answers: 1) “I could have done better” and 2) “Something must be wrong.” In the thousands of seminars I have conducted over the years, I have presented a situation like this to the public and I cannot remember getting anything other than these two answers. Sometimes people reverse them, but the response is usually automatic: “I could have done better” and “Something must be wrong.” Let’s look at each of these answers separately.
First reaction: I could have done better. The interesting thing about it is that it has nothing to do with the price. It has to do only with how the other person reacts to the proposal. What if you offered $ 7,000 for the car, or $ 6,000, and they told you right away that they would take it? Don’t you still think you could have done better? What if this bearing seller had accepted $ 150 or $ 125? Don’t you still think you could have done better?
Second reaction: Something is wrong. My second reaction when I received the accepted offer on the pitch was, âSomething is wrong. I’ll take a deep look at the draft title report. Something must be happening that I don’t understand, if they’re willing to take an offer that I didn’t think they would take.
The second thought you would have when the seller of this car said yes to your first offer is that something is wrong. The second thought the buyer of bearings will have is, âSomething is wrong. Maybe something has changed in the market since the last time I traded a rollover contract. Instead of going ahead, I think I’ll tell this seller that I need to check with a committee and then talk to other vendors.
Both of these reactions will go through anyone’s mind if you say yes to the first offer. Let’s say your son came to you and said, “Can I borrow the car tonight?” And you said, “Sure, Son, take it.” Have a good time. Wouldn’t he automatically think, âI could have done better. I could have gotten $ 10 for the movie with that â? And wouldn’t he automatically think, “What’s going on here?” Why do they want me to leave the house? What is going on that I don’t understand?
It is a very easy negotiating principle to understand, but it is very difficult to remember it when you are in the middle of a negotiation. Maybe you’ve formed a mental picture of how you expect the other party to respond, and that’s a dangerous thing to do. Napoleon Bonaparte once said: âThe unforgivable sin of a commander is to ‘form an image’ – to assume that the enemy will act in a certain way in a given situation, when in fact his response may be totally. different. You’d expect them to counter at a ridiculously low number, and to your surprise, the other person’s proposal is a lot more reasonable than you might think.
Here’s an example: You’ve finally found the courage to ask your boss for a raise. You’ve asked for a 15 percent raise, but you think you’ll be lucky to get 10 percent. To your amazement, your boss tells you that he thinks you are doing a great job and would like to give you a raise. Can you think of what wonderfully generous company you work for? I do not think so. You probably wish you had asked for a 25 percent raise.
Your son is asking you $ 100 for a weekend hike. You say, âNo way. I’ll give you $ 50 and not a dime more. In fact, you’ve bracketed his proposal (see Chapter 1) and expect to settle for $ 75. To your surprise, your son said, âThat would be tight, Dad, but okay. $ 50 would be great. Do you think how smart you were to bring it down to $ 50? I do not think so. You’re probably wondering how much less he would have settled for.
You are selling real estate that you own. You are asking for $ 100,000. A buyer makes an offer for $ 80,000 and you counter for $ 90,000. You think you’ll end up at $ 85,000, but to your surprise, the buyer immediately accepts the $ 90,000 offer. Admit it, don’t you think that if they had jumped to $ 90,000 you could have raised it further?
Power negotiators are careful not to fall into the trap of saying yes too quickly, which automatically triggers in the other person’s mind, “I could have done better, and next time I will.” “A sophisticated person will not tell you that they felt they lost in the negotiation, but they will hide it in the back of their mind, thinking,” the next time I deal with this person, I will be a more negotiator. hard. . I won’t leave any money on the table next time.
Something must be wrong
Declining the first offer can be hard to do, especially if you’ve been calling the person for months, and just when you’re about to give up, they offer you an offer. It will inspire you to take what you can. When this happens, be a power negotiator – remember not to say yes too quickly.
Many years ago, I was president of a Southern California real estate company that had 28 offices and 540 vendors. One day a magazine salesman walked in trying to sell me some ad space in his magazine. I knew the magazine and knew it was a great opportunity, so I wanted my business to participate. He made me a very reasonable offer that required a modest investment of $ 2,000.
Because I love to bargain, I started using Gambits on him and cut him down to the insanely low price of $ 800. You can imagine what I was thinking at the time. Law. I thought, âHoly cow. If I make it go from $ 2,000 to $ 800 in a few minutes, I wonder how far can I get it to go if I keep trading? I used a Gambit medium on him called Higher Authority (see Chapter 7). I said, âIt looks good. I just have to run it through my board. Fortunately, they are meeting tonight. Let me pass them by and come back to you with the final deal.
A few days later, I called him back and said, âYou will never know how embarrassed I am about this. You know, I really felt like I would have no problem selling the board on that $ 800 price you quoted me, but they’re so hard to manage right now. The budget has given everyone a headache lately. They came back with a counter offer, but it’s so low that I embarrass me to tell you what it is.
There was a long pause, and he finally said, “How much did they agree?
“$ 500. “
âIt’s okay. I’ll take it,â he said. I felt cheated. Even though I had traded it from $ 2,000 to $ 500, I still felt I could have done better. .
There is a postscript to this story. I am always reluctant to tell stories like this in my seminars, lest it fall on the person I was negotiating with. However, several years later, I was speaking at the massive California Association of Realtors convention that was held that year in San Diego. I told this story in my speech, never imagining that the magazine salesman was standing at the back of the room. As I finished my presentation, I saw him make his way through the crowd. I prepared for what I thought was verbal abuse. However, he shook my hand and said with a smile, âI cannot thank you enough for explaining this to me. I had no idea what impact my tendency to jump on a quick deal had on people. I will never do that again.
Written by Roger Dawson. Adapted and reprinted with permission from Career Press, Secrets of Power Negotiating, 25th Anniversary Edition by Roger Dawson is available wherever books and eBooks are sold or direct from the publisher at www.redwheelweiser.com
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