There are many thoughts regarding negotiating a significant sale and we’ve covered a number of them. However, that’s not all. Here are some more of my thoughts on negotiation tactics.
The Exchange-Exchange Negotiation Tactics
You’ve supplied a lot of information to the buyer already. That’s normal. But realize some buyers ask for more as a ploy to stretch out the talks. For instance, if you’re financially weak, stretching out the time as you become weaker might make you receptive to a lower offer. If you feel this is so, counter by asking them for information every time they ask.
“I’ll be glad to give you a detailed list of my top accounts and, in exchange – so I can see how our businesses would fit – how about fixing me a list of yours?”
Using this tactic – get something every time you give – trains your counterpart to ask only for useful facts. Why? They will know they will have to give us something in return.
And there is no requirement you answer just because they ask. A short response could simply be, “I’m not prepared to answer right now.”
They Want to Meet Negotiation Tactics
So they call and want to meet. You agree. Your place is better than theirs. A neutral place is better if they won’t meet at your place. And their place is better than not meeting at all.
You can now expect a low side off (Reference Point (offer). It’s $300k.
You don’t take the offer, but they swear that’s the best they can do. You support your offer: “You can earn this back in less than three years just by running the place–then all of the money will be yours forever.” And, talk about how they can cut costs and/or increase sales because of additional capacity
They might not buy it, but it is a good response. If they do buy it, sign the papers and take it to the bank. Assuming they don’t, the ball is now in your court. Don’t counter unless there is a really compelling reason (you are about to die if you don’t make a deal). Take it back to “your people.”
In this give and take, an offer is more than an offer. The offer has also to do with time and the amount of change. Big changes made fast indicates further concessions can be had.
In this hypothetical, take two weeks and, in a show of compromise, drop to $520,000 – that’s $30,000 of found money for them. Don’t focus on percentages. People spend dollars, not percentages.
Also, drop some good news every time you can. “Sales are up again this month. Gets any better, I’m going to have to ask for more,” or any other good news to bolster your position. But remember, this must be real, not fiction. People don’t trust liars.
Again, this is an art form, not a science. In general, ten percent is a big move at one time as a rule of thumb. Dropping further and faster may dislodge your Reference Point and establish a lower one to bracket against.
Assume they have upped their position to $320K and you are still at $520K. They mumbled about cash flow and you countered with your ever increasing sales. You show them a little more willingness to move and suggested you might consider $500K, but that is your bottom line. They came back to you with their final offer of $350K. You say you will take it to your people.
Again, we have an art, not science. You could return their offer and NOT counter. Just say you can’t do it for that, your alternatives are better and ask them to reconsider.
Will it always work? No. You have to know where you are and what you want. The flip side is you can usually go back and tell them you have reconsidered and want to start talking again if they don’t respond.
Those are some tactics to put in your negotiation toolbox. Remember, it’s an art, not a science. I’ll have some final thoughts next time.
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Receive daily email training messages as well as have access to our short (8 to 10 minute) printing-specific training classes on product knowledge and selling through the new CPrint Academy. $495 for a year’s subscription covers everyone in your shop. Go to www.cprintalliance.com for more information. Message Tom at tom@cprint.com or reach him at (304) 541-3714, connect on Facebook and LinkedIn and follow his business tweets on Twitter @tomcrouser. Tom is Senior Contributing Editor of this magazine, chairman of CPrint® International and principal of Crouser & Associates, Inc., 235 Dutch Road, Charleston, WV 25302, www.cprint.com.
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