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The #1 Way to Know If Their Price Is Soft

By |March 21, 2016

pricetag.jpgThey’re selling.

As soon as someone starts selling, you know their price is soft.

 They’re trying to hold the line.

But yet, is it really that simple?  Here’s the problem – they’re also testing you to see if they feel like giving in.

There are two issues: Is there flexibility in the price (or position); and is there flexibility in them? Just because there’s flexibility in the price doesn’t mean there’s flexibility in them.  Your approach will either make or break this.  

There’s both a negotiation rule and 2 Laws of the Universe here.  

Rule: Never be mean to someone who can hurt you by doing nothing.

This means your approach can remove all flexibility in them.  People get their “back” up (may stiffen in their resolve and even make decisions against their best interest) based on things you may have done/said, or which were done to them recently leading up to their interaction with you.  Their boss could have just read them the riot act earlier that day; their significant other could have given them a hard time; maybe they’ve done so well that month they aren’t hungry in any way and will only close deals that are extremely profitable for them. Who knows?

Law of the Universe: People are 6x more likely to make a deal with someone they like.

(It’s also very difficult to resist someone who is incredibly “nice” – read that as charming, upbeat, empathic and persistent). 

Law of the Universe: The more effort they put into selling you, the more flexible they will become.

Their effort increases their investment of time, energy, and emotion into the deal (as Jim Camp would put it – “building their budget”).  Camp describes the emotional investment that people put into a deal as a 4x multiplier. (According to Camp “Time” is 1x, “Energy” is 2x, “Money” is 3x and “Emotion” is 4x.)  Interesting that he sees “emotion” as the biggest factor.  And The Black Swan Group would agree.   

The negotiation skills The Black Swan Group teaches help you leverage this dynamic and build a great relationship with them at the same time. Labels, mirrors and paraphrases are especially effective here – particularly mirrors (repeating the last 3 words or a selected 3 words).  One of our good friends (a client and a colleague) makes it a point to use a mirror on every position his counterparts take.  He says it tells him immediately if they have any flexibility.

Here’s a recent negotiation of someone else using this idea. (The names have been changed.)

Susan: Hi Amy, this is Susan over at the Globe Lounge at the Hyatt, I am returning your call about a possible event you are looking to host…

Amy: Hi Susan, yes, thank you for returning my call. I am calling on behalf of a student organization at The University, and we’re looking to host an event to celebrate the end of the academic year with our board members.

Susan: Great, and which date were you looking at?

Amy: We are looking to secure a venue for Thursday (date) from 6-9pm. It sounds like you’re available?

Susan: Let me check…yes, that’s date is available and 6 to 9pm is no problem. We could put you in Globe B which is indoor/outdoor and there’s plenty of space for catering.

Amy: Catering? (Here’s the mirror.)

Susan: Yes, we have in-house catering available for food and beverage. Let me see, for a Thursday night, hmm…ok here it is, the food and beverage minimum is $2,000. That includes all the alcohol and food that is ordered.

Amy: (long pause)…Hmm, that’s about $80 per person. That’s quite a lot…(silence)

Susan: Yea, it does sound like a lot but you can factor 2-3 drinks per person and a couple of appetizers per person, and that’ll probably get you there. Plus, the ping pong tables in the room will be free of charge, so the entertainment is taken care of.

Amy: How is all of this calculated?

Susan: Good question. Well, the drinks are $12 to $15 each and we’ll have a bartender dedicated to your room. Appetizers are delicious, we get so many great reviews. I would say those cost somewhere between $8 to $20 depending on what you order.

Amy: You know, I’m thinking about it more, and the minimum is just too high for us. I assume there’s tax and service fees involved as well?

Susan: Yes, there’s a 9% tax and a 20% service charge added to the bill.

Amy: Okay, well thank you for all the information. I’m just not sure if this is the right venue for us. We didn’t budget around $90 per person, nor did we anticipate a minimum so high.

Susan: Can I ask how you thought of us as a venue?

Amy: Sure, one of the students in our program received a promotional email from Globe lounge indicating there was a 10% discount for a group event until the end of March.

Susan: Oh, I haven’t heard about that. I can ask my manager…

Amy: No worries, at this point, I don’t think this is a viable option for us. I wouldn’t be comfortable committing to a minimum higher than $1,000.

Susan: Ok, thanks for letting me know. I can ask my manager about that and see what we can do for you. Can I have your email address?

Amy: Yes, it’s XXXXX. So, to recap, let me see if I have all the correct information. You are available on Thursday (date) and have Globe Lounge B available from 6 to 9pm. The space is indoor/outdoor and can accommodate our group. There will be a dedicated bartender and food and beverages need to sum up to a minimum of $2000, plus 9% tax and a 20% service charge.

Susan: Yes, that’s correct. I will follow up with you about the minimum.

Amy: Great, thanks, Susan. I really appreciate it. Have a great day!

Susan followed up an hour after the call and said the $1,000 minimum was acceptable.

Sales people have to eat too!  They’ve got a job to do and you want to create a great relationship with them and let them eat (some) so they will be there to work with you for a long time to come.  If you kill them now when they are working hard to keep their job, then what you did to them will be the first thing their boss explains to their replacement when that replacement comes in.

Great relationships make great deals.

Make it rain!

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