|
Peter Barron Stark
President
Subscribe
for Free !
Introducing our
newest book
Here's what our readers
are saying ......
Order Your Copy Today
Visit our website at
www.everyonenegotiates.com
for more great resources
on negotiation
Contact us!
Peter Barron Stark
& Associates
11417 W. Bernardo Ct.
San Diego, CA 92127
Phone: 877.727.6468
Phone: 858.451.3601
FAX 858.451.3604
|
Tactic #50 - Power of Competition
Summary: Using competitive bids to put
pressure on a counterpart.
In most businesses, the Power of Competition
can be devastating. The seller who knows that a customer can easily go
to the competition for the same product or service has to justify
everything and may end up giving away more than originally planned. Just
the threat of competition may be enough to force concessions.
Example
Using the Power of Competition, a client
states, “I have gotten three bids, and yours is five hundred dollars
higher than the other two. I would really like to work with you, but
your price is too high.”
Counter
To counter this challenge, the vendor should
defend her price, citing her product’s quality and service. Once we were
out on a sales call with a seasoned veteran who responded to a client’s
question about price by stating matter-of-factly, “Mrs. Jones, my price
is higher than the competition’s because I am the one who is going to do
the job right.” He said this so confidently that he convinced the client
and us.
Realize that many clients will say your price is too high just to get
rid of you when they have no intention of working with you even if you
do lower your price.
This tactic is one of 101 strategies and tactics
featured in The Only Negotiating Guide You'll Ever Need, by Peter
Stark and Jane Flaherty.
To view this month's issue of The Master
Negotiator, the premiere on-line newsletter for negotiators,
follow this link:
The Master Negotiator, Volume 2, Number
5 Listening Skills Part I
To view previous Negotiating Tactics of the Week,
follow this link:
Negotiating Tactics of the Week
Ask the
Negotiator
Dear Peter,
I just read about The Puppy Dog tactic, and I believe I have
been a victim of it. I recently put an offer on a house for some
clients. I spoke with the listing agent about specific numbers to
work with before drawing up a contract, but when I got in touch with
the agent later, he counter-offered $5,000 higher than the price we
had discussed. Meanwhile my clients have been making plans for the
house, thinking it is already theirs. How do I deal with this
situation?
Sincerely,
Alpa
Dear Alpa,
You and your clients just experienced The False Alarm. After
talking with the seller's agent, you thought you had struck a deal, but
then discovered that the sellers were just getting started. What you
don't say is where the property is located. In hot markets where a
seller may have multiple offers, there is not much you can do. If your
buyers have already mentally bought the house, they may have to “bite
the bullet” and pay the additional $5,000. If the house is not in a hot
market, you may try the strategy of the Withdrawn Offer. Call the
seller's agent and say that you are going to take your buyers out this
afternoon to look at additional houses. If your clients balk at that,
try the tactic of Never Saying “Yes” to the First Offer: Counter
the seller’s price at $1,000 above your initial offer. Or you could try
the Trade-Off Concession: Agree to pay the higher price but only
under conditions that are favorable to the buyers. For example, they
might want a 30-day escrow, or ask that the furniture be included with
the house, or require the seller to pay for all repairs noted in the
inspection report. Whatever happens, remember, if you don't negotiate,
the sellers will wish they had raised your offer $10,000!
Best regards,
Peter Stark
Ask the
Negotiator - Are you involved in a
negotiation and not sure what strategies or tactics to use?
Send in your toughest negotiation
challenge and our team of expert negotiators will outline a specific
plan to ensure your success. Please send your negotiation
challenge to
info@everyonenegotiates.com. If your challenge gets
published, we'll send you our special edition Negotiation Mug,
filled with sweet treats.
To forward this tactic to a friend or colleague
please click on the forward link below
|
