Are your negotiations predictable? Do your tactics harm your position? While consistency is often an admirable trait, it can be devastating to your negotiation strategy.
Consider, for example, what happens when you repeatedly increase your offer by consistent amounts.
A developer wanted to buy the properties on the block of an older central city neighborhood so that he could build a new shopping center. The project would be very lucrative for the developer, and he desperately wanted to start construction as soon as possible. Time is money, after all, and he could not afford any delays.
The developer’s representative quickly purchased all but one home. The lone hold-out, an elderly woman who had lived in her modest home for more than 40 years, politely refused his offer to purchase the home for its fair market value.
The developer instructed his representative to get the deal done at any cost. The representative decided to make her an offer she could not refuse, and offered her $20,000 more than the appraised value of the home. She again declined.
The representative went back four additional times, each time increasing the offer by $20,000. Each time she declined.
After the fourth rejection, the representative tried to persuade the woman to sell. “I’ve offered you $100,000 more than the house is worth, ma’am,” he said. “Can’t I persuade you to sell?”
“No thank you,” the woman replied. “Every time you come back you increase your offer by $20,000.”
The representative learned from his mistake. The next three times he returned, he increased the offer by $10,000, then $6,000, then $2,000. Ultimately, the woman agreed to sell.
Vary the speed and timing of your negotiation. Decrease your offer when the other side expects an increase, delay making a counteroffer, or vary the incremental change in your offers. Whatever you do, lose the predictability in your negotiations.
Negotiate effectively, and your business will boom.
I am, first of all, a husband and father. Rebecca and I have been married 23 years; we have four children ages 21, 19, 18, and 15. My family is my greatest joy in life. For 24 years, I have practiced business law in Arizona, the past eleven as the managing partner of Gibson Ferrin, PLC. We help businesses and their owners meet their business and personal goals. My practice focuses on the intersection between intellectual property law and employment law. I help businesses prosper by properly managing their intangible assets.
I am licensed to practice law in Arizona only. Though I believe the advice in BiziBoom™ is based on sound legal principles, the law of your jurisdiction may be different. The advice given on BiziBoom™ is informational only; it may not be applicable to your specific situation. You should seek the advice of competent counsel in your jurisdiction, someone who knows the particular legal requirements of your jurisdiction. Until you have signed an engagement letter with Gibson Ferrin, PLC, neither the Firm nor I are acting as your legal counsel. Nothing on BiziBoom™ creates an attorney/client relationship between you and the Firm.