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Tactic #23- Uncovering the Real Reason
Summary: Asking questions to reveal any
hidden motives behind a counterpart's rejection of a deal point.
To be an effective negotiator, you have to learn
to Uncover the Real Reason behind a counterpart’s resistance.
Example
Jack is
refinancing a home. His mortgage broker itemizes all the charges
associated with securing a loan. Jack asks if the fee for the appraisal
for the house can be waived since he had an appraisal done six months
earlier and would like to use that appraisal. The mortgage broker says
that getting an appraisal is standard company policy and her boss would
never approve of waiving the appraisal or the fee. To find out if there
is another reason the broker does not want to waive the fee, Jack could
ask to speak directly to the broker’s boss. If the explanation the
broker has given is not exactly accurate, the broker will probably make
a concession. Better yet, if she does let Jack talk to her boss, he may
succeed in gaining something he would not have gained if he had not used
this tactic.
Counter
The
mortgage broker has three possible counters. First, she could provide
detailed information about why this deal point is critical to the
success of this negotiation. Second, she could come up with options. For
example, she could suggest that, instead of doing a complete
walk-through of the house, the appraiser might do a drive-by appraisal
to help lower the costs. Third, using the tactic of Higher Authority,
she could say, “On the off chance that I could get my boss to waive the
appraisal fee, would you like me to ask her?” This gives the broker the
opportunity to approach her boss with the request. Then she can go back
to Jack and waive the fee entirely, waive part of the fee, or say
something like, “I spoke to my boss and she said the company’s policy
makes waiving the fee nonnegotiable.”
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.
Ask the
Negotiator
Dear
Peter,
I am an purchase executive in an Indian Manufacturing company,
having many equipment's imported from Germany for which spares are
required on a continuous basis, every year the prices for spares
rise in the range of 5 to 8 % , coupled with the Euro appreciating
against the Indian Rupee every year the landed cost of spares become
costly for us.
Secondly, the packing and forwarding costs (FOB airport / seaport)
is also 10 to 14 % of the spares cost .
Thirdly, almost all the above equipment manufacturers have now
established agents/ representative in India and the quotations are
routed through them, even if we send the enquiry to the German
Companies. The order is placed directly on the German suppliers with
payment terms of LC. We feel that the involvement of the local
agents who are not providing any service to us are also indirectly
adding to the our cost.
All the suppliers are reputed companies and OEM suppliers for which
there is no alternate with us. However we still feel that we can
negotiate better prices. Presently we are negotiating by e-mail and
fax letters and have no personal interaction with any of the
marketing people / top brass of our suppliers.
Please advise as to how we can negotiate better prices, lower
packing and forwarding costs and no involvement of local agents.
Thanks and regards
M.K.
Dear
M.K.
You said it, "there is no alternative to any of our OEM suppliers."
You said it and your suppliers know it. When you have no choice, it
makes it much more difficult to negotiate. The supplier can say no
to any of your requests and in the end, you still need the spare
parts to run your machines.
Here are a couple of ideas. One idea is to go meet with your
suppliers in person. It is harder to say "no" when you are face to
face. Tell the supplier you need to lower your costs in order to
remain competitive and your goal is to leave the meeting with
solutions.
In regard to packaging, freight forwarding and shipping costs, those
are negotiable. You may try pricing your goods FOB the
manufacturer's facility and you source your own shipping.
It all depends on the manufacturer's arrangement with their agent in
India. The manufacturer may be under contract to pay the agent on
any sale in a specific territory. If that is the case, you may go
around the agent as you described, but the manufacturer still pays
the commission. If you can't get the agent out of the loop, why
don't you put the agent to work for you and see if they can
negotiate better pricing?
Last, if you still run into "no" at every turn, then negotiate the
price of spares up front the next time you negotiate the purchase of
new equipment from your suppliers. You are in a much better position
to negotiate future pricing arrangements when you have competition
fighting over a current sale.
Best
Regards,
Peter
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 mailto:patti@pbsconsulting.com.
If your challenge gets published, we'll send you an autographed copy
of The Only Negotiating Guide You'll Ever Need, by Peter
Stark and Jane Flaherty ($14.95 retail)
WOW!!
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
9 Dealing with the Untrustworthy Counterpart
To view previous Negotiating Tactics of the Week,
follow this link:
Negotiating Tactics of the Week
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