Be wary of what is lost or gained in the dying throws of a negotiation. We might be fatigued, deal focussed, or even under pressure to reach budget. Without a disciplined approach, it is quite likely mistakes will be made.
If you think about it, when would you prefer to buy your next vehicle? In the middle of that salesperson’s budget cycle or at the end, when they may be under pressure?
In fact, some supermarkets have even been subjected to regulator scrutiny after deliberately putting their suppliers under time pressure. They recognised that a lot of value changes hands towards the end, so they refused to meet with their suppliers until contracts were about to run out. The rationale was that suppliers would make greater concessions to preserve the relationship when under pressure.
Of course, I’m not suggesting that you act unethically, rather that you account for the influence time might have on your negotiation.
So, if you are BUY side of this equation, my advice would be to remember that salesperson you are dealing with is probably keen for your business, and that your signing of the contract is a concession. In other words, what can you get in return for that pen to paper? You might be surprised what they will be prepared to throw in… free samples, an account planning lunch at your favourite restaurant, or even a hefty discount.
However, it is much more likely to happen if you ask for it. To give you an example, a procurement professional was aware her supplier had a corporate box at the Rugby League. As they neared the end gave it a bash and proposed: ‘if you can agree to invite me to the next game in your corporate box, I will sign the paperwork right now’. They happily accepted. She is likely to ask for more next time!
If you are on the SELL side of the equation, my advice is quite simple:
Firstly, recognise that it is not always the salesperson who is under time pressure. Sometimes buyers are under time pressure! I’m not suggesting you hold your clients ransom, but you might ask for something in return that helps your cause. For example, ‘if you will agree to share your scope of work for the year with me and invite us to pitch for it, I will make sure this urgent order leaves the warehouse this morning.’
Secondly, if clients are preferring to wait until they think you are under time pressure… consider why? They might think that if they deal with you earlier they might have to pay more. How could you help them feel that your timeframes are in their interest?
If their ask is small and reasonable – Great news, if they have moved on from main issues like price and scope to small wish-lists, you are probably very close. You could consider ‘trial closing’ the wish-list for the deal – ‘are you saying that if I can agree to some free samples, you will sign the paperwork?’ If they say ‘no’, this is an opportunity to explore what else stands in the way of the deal.
If their ask is larger – This isn’t necessarily bad news either, but it does require more discipline to deal with. The key thing here is to figure out under what circumstances you could agree to it. For example: If they want longer payment terms… could you increase the price?
If their ask is ridiculous – This is more difficult again, but the key is not to say ‘no’. You might begin by asking them why they need their ridiculous ask and what the basis for you funding it is. By asking them the basis (rather than to justify), you might find that they are embarrassed by their rationale and back away from the ask. If they stick with it, then the discipline really kicks in, under what circumstances could you agree? Perhaps they ask for an unreasonable discount… you might say ‘if you can provide 1 person to assist with the labour and commit for a year, we can offer the discount’.
Let me summarise
Recognise if time is (or could be) having an impact on your negotiations and be more deliberate about how you utilise time.
- If your counterparties are keen to move things forward, use that concession to ask for something in return.
- If your counterparties are dragging their feet, help them understand why your timeframes are in their interest.
- If your counterparties are holding you ransom, under what circumstances could you agree?