Image by jonny goldstein via FlickrBuzzwordy's Reservoir of Marketing Tips
Negotiation Re-visit
Hello Fans and Readers of Buzzwordy's Cranium Booster Tales,
Since posting my top 10 negotiation tips on September 14, 2010, I've been getting comments from some readers expressing their interests in seeing illustrations and examples for these tips. After running into more readers over this weekend, I feel compelled to put some examples together in order to make my tips stick in people's minds.
The following tip happens to be the first one from my September 14, 2010 negotiation post.
When negotiating with your clients and vendors, never give them a clear indication of how far you are willing to go - whether the price is up or down. Just sit tight, smile, and stick to your gun. Usually a poker face works every time. Time is your best friend in negotiation - learn to love it.
Lets use Buzzwordy in this example.
The Location: a small and stuffy room in the customer's office
The Parties: Buzzwordy and the nagging customer
The Topic: price reduction request
"Buzzwordy, your company has been charging us an arm and a leg for the last three years on this particular widget. On behalf of my company, I really feel a sense of injustice. I sincerely hope that you and I can resolve this discriminatory price practice today!" complained the nagging customer.
"Thank you so much for bringing this matter to my attention Mr. Customer. This is the reason why I am here today. My mission is to make sure that your concern can be remedied and we'll continue to do great business together." smiled Buzzwordy.
"Listen Buzzwordy, my request is pretty darn straight forward. What I want from you is to get a retro price discount of 30% or should I say a refund for the last 2 years of widgets purchased from your company. Moreover, I want you to give us a 20% quarter-to-quarter discount for this widget starting next month. I strongly feel compelled for you to honor such a reasonable request to my company. By complying with this request, I believe our company and yours can continue to do great business together." demanded the nagging customer.
"I must say that you have put a lot of thoughts into your request and this is very commendable. Since we have already given you the most favored nation pricing from the beginning, I must consult my executive team as well as my finance department to get a read before responding to you. Just to ensure that your request is being handled with top priority, I'll inform them immediately. This will just take a few minutes and thank you so much for your patience." smiled Buzzwordy.
"OK, I'm waiting!" responded the nagging customer.
After a few minutes, Buzzwordy was ready to update the nagging customer.
"Mr. Customer, thanks for waiting. I just got a reply from my C-team and they deeply value our relationship. On this note, we're prepared to address your future demand by giving you a 10% annual discount starting next month, however, our company policy prohibits us from giving any of our customers a retro discount or refund because this will impact our standard accounting practice. Please understand our limitations!" smiled Buzzwordy.
"Just hold it right here. This is ridiculous and I cannot accept your offer. No way!" screamed the nagging customer.
"I fully understand how you feel at this moment and am prepared to spend my quality time with you for as long as you need me for. Lets not give up and we should continue to try to work this request out together." smiled Buzzwordy.
The nagging customer was unhappy but he knew that Buzzwordy was trying to help him find the best solution. He realized that his refund request was a pie-in-the-sky one and very rarely would he ever get his vendors to grant him this wish. He then focused his energy on negotiating for the best future deal. Since Buzzwordy had plenty of time on his hands, he was using this weapon as his leverage to rein in Mr. Customer. Guess what? After a long and tiresome negotiation, Mr. Customer did agree to accept a 5% quarter-to-quarter discount with the commitment from Buzzwordy's management to re-visit the widget price at the end of the 12-month period.
So hats off to Buzzwordy for using his poker face tactic and time as his best friend to rein in Mr. Customer.
Buzzwordy
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