• Training
• Clients
• Resources
• Consultants
• Approach
• Contact us

Negotiation Newsletter

Negotiating Price With a Salesperson

Let's suppose that you're in charge of buying new computer equipment for your company. How would you convince a salesperson to give you the lowest possible price? I would let the other person come in and have her go through her entire presentation. I would ask all the questions I could possibly think of and when I finally couldn't think of another thing to ask, I would say, "I really appreciate all the time you've taken. You've obviously put a lot of work into this presentation, but unfortunately it's just not the way we want to go; however I sure wish you the best of luck." I would pause to examine the crestfallen expression on the salesperson's face. I would observe her slowly package her presentation materials. Then at the last possible moment, just as her hand touched the doorknob on the way out, I would come back with this magic expression. There are some magic expressions in negotiating. If you use them at precisely the right moment, the predictability of the other person's response is amazing. I would say, "You know, I really do appreciate the time you took with me. Just to be fair to you, what is the very lowest price that you would take?"

Would you agree with me that it's a good bet that the first price the salesperson quoted is not the actual bottom line? Sure, it's a good bet. The first price a salesperson quotes is what I call the "wish number." This is what she is hoping the other person would do. If the other person said okay to that, she would probably hurry all the way back to her sales office and run in screaming, "You won't believe what just happened to me. I was over at XYZ Company to make a bid on the computer equipment they need for their new headquarters. I went over the proposal and they said, 'What's your absolute bottom line price?' I was feeling good so I said, 'We never budge off list price less a quantity discount, so the bottom line is $225, 000,' and held my breath. The president said, 'It sounds high, but if that's the best you can do, go ahead and ship it.' I can't believe it. Let's close the office and go celebrate." So, the first price quoted is what I call the wish price.

Somewhere out there, as the song says, there's a "walk-away" price. A price at which the salesperson will not or cannot sell. The other person isn't aware what the walk-away price is, so he or she has to do some probing, some seeking of information. He or she has to attempt some negotiating Gambits to see if they can figure out the salesperson's walk-away price.

When you play Reluctant Buyer, the salesperson is not going to come all the way from the wish price to the walk-away price. Here's what will usually happen. When you play Reluctant Buyer, the salesperson will typically surrender half of his or her negotiating range. If that computer salesperson knows that bottom line is $175,000, $50,000 below the list price, he will generally respond to the Reluctant Buyer Gambit with, "Well, I tell you what. It's the end of our quarter, and we're in a sales contest. If you'll place the order today, I'll give it to you for the unbelievably low price of $200,000." He'll give away half his negotiating range, just because you played Reluctant Buyer.

Remember that when people do this sort of thing to you, that it's just a game that they are playing on you. Power Negotiators don't get upset about it. They just learn to play the negotiating game more proficiently than the other side.

Vital points to remember:

• Watch out for the Reluctant Buyer.
• Playing this Gambit is a wonderful way to squeeze the other side's negotiating range before the negotiation even starts.

The other person will usually give away half his or her negotiating range just because you use this.

Roger Dawson, CSP, CPAE is a negotiation consultant and a sales and management speaker.

© Copyright 1996 - 2008 Negotiation Skills Home | Email us
Privacy Policy | Terms | Guarantee | Site Map

Tel: +61 1300 769 927 or +61 (0) 2 9948 4806 ABN: 70117983945
Address: Level 31, ABN AMRO Tower, 88 Phillip Street, Sydney NSW 2000