Friday, March 09, 2007

Here's a guest article from one of the masters of negotiation, Roger Dawson.

Learn to Play the Reluctant Buyer When You're Purchasing
Roger Dawson

Let's say that you're in charge of buying new computer equipment for your company. How would you get a salesperson to give you the lowest possible price? I would let the other person come in and have her go through her entire presentation.

I would ask all the questions I could possibly think of and when I finally couldn't think of another thing to ask, I would say, "I really appreciate all the time you've taken. You've obviously put a lot of work into this presentation, but unfortunately it's just not the way we want to go; however I sure wish you the best of luck." I would pause to examine the crestfallen expression on the salesperson's face. I would watch her slowly package her presentation materials.

Then at the very last moment, just as her hand hit the doorknob on the way out, I would come back with this magic expression. There are some magic expressions in negotiating. If you use them at exactly the right moment, the predictability of the other person's response is amazing. I would say, "You know, I really do appreciate the time you took with me. Just to be fair to you, what is the very lowest price that you would take?"

Would you agree with me that it's a good bet that the first price the salesperson quoted is not the real bottom line? Sure, it's a good bet. The first price a salesperson quotes is what I call the "wish number."

This is what she is wishing the other person would do. If the other person said okay to that, she would probably burn rubber all the way back to her sales office and run in screaming, "You can't believe what just happened to me. I was over at XYZ Company to make a bid on the computer equipment they need for their new headquarters. I went over the proposal and they said, 'What's your absolute bottom line price?' I was feeling good so I said, 'We never budge off list price less a quantity discount, so the bottom line is $225,000,' and held my breath. The president said, 'It sounds high, but if that's the best you can do, go ahead and ship it.' I can't believe it. Let's close the office and go celebrate." So, the first price quoted is what I call the wish price.

Somewhere out there, as the song says, there's a "walk-away" price. A price at which the salesperson will not or cannot sell. The other person doesn't know what the walk-away price is, so he or she has to do some probing, some seeking of information. He or she has to try some negotiating Gambits to see if they can figure out the salesperson's walk-away price.

When you play Reluctant Buyer, the salesperson is not going to come all the way from the wish price to the walk-away price. Here's what will typically happen. When you play Reluctant Buyer, the salesperson will typically give away half of his or her negotiating range. If that computer salesperson knows that bottom line is $175,000, $50,000 below the list price, he will typically respond to the Reluctant Buyer Gambit with, "Well, I tell you what. It's the end of our quarter, and we're in a sales contest. If you'll place the order today, I'll give it to you for the unbelievably low price of $200,000." He'll give away half his negotiating range, just because you played Reluctant Buyer.

Remember that when people do this kind of thing to you, that it's just a game that they are playing on you. Power Negotiators don't get upset about it. They just learn to play the negotiating game better than the other side.

Key points to remember:

Look out for the Reluctant Buyer.
Playing this Gambit is a great way to squeeze the other side's negotiating range before the negotiation even starts.
The other person will typically give away half his or her negotiating range just because you use this.

Roger Dawson is a professional speaker and the author of two of best selling books on negotiating: Secrets of Power Negotiating and Secrets of Power Negotiating for Salespeople, both published by Career Press. He was inducted into the Speaker Hall of Fame in 1991. You can contact him at rogdawson@aol.com.

Tuesday, March 06, 2007

Saturday, March 03, 2007

Do you own a small business?

Then be sure to read the new blog, "Small Business Goldmine" for tips on how to make big profits. Visit http://smallbusinessgoldmine.blogspot.com