Art of Negotiation
Chapter 19. The method of retreat
Ask yourself if what you’re doing today is getting you closer
to where you want to be tomorrow. ― Paulo Coelho
This is one of the most powerful tools in negotiation.
In fact, you should not enter into a serious negotiation
if you are not prepared to retreat in the event
that the most important goal in the transaction is not achieved.
In the previous section,
we talked a lot about the importance of developing options (chapter 12)
and looking to see if there is another way.
It is important to learn about the negotiating partner
to find out their true wants,
When entering a negotiation,
you need to have all the information you need to be able to exit
if you are not satisfied
with the price or terms offered.
The opposite of having options ready is entering a negotiation
with no choice but to find a way to agree with the other side.
When there are no options,
you will often not have the power to make decisions
or will not have the freedom to set prices and terms.
the more freedom you have,
the easier it is to reach a good deal.
Prepare to withdraw from the negotiation
I try my best to always have the initiative,
which means I can withdraw at any time.
This gives me great bargaining power.
That almost always ensures that I can get a better deal
or stop at the right time.
Use the exit method when you want the lowest possible bid
and highest possible sell price.
When I’m in a negotiation,
I’ll usually say,
“Tell me your best price,
and I’ll decide whether or not to buy.”
This kind of statement often frustrates the other party.
They look forward to start with a different price point.
Now, they are facing the risk
that I will withdraw immediately
if the price they offer is not reasonable.
Or, if I were a buyer,
I would say to the seller:
“Tell me your exit price.”
In other words,
tell me the price that you wouldn’t sell
if it was any lower.
Tell me the lowest price
and if I can meet,
we can discuss further.
If not, I will withdraw and let’s forget about this.
Usually this method will bring you to a price much lower
than the opening price the opponent intends to offer.
Refusing to double talk
I don’t like double-talk, especially when in a hurry.
I want to know the exit price.
I bought houses,
cars, appliances, and more with the exit price.
When I sell something,
nearly all of my exchanges begin with,
“This is the lowest I can afford.
I can understand if your side cannot accept this number.”
Sometimes, people will ask,
“Now you’re blocking me
by saying you’re going to back out
while you want to buy this product (or service)?”
Remember that withdrawal is only one way to negotiate.
You can get up and walk out of the room or store,
and come back later.
But the rule is:
You never know the best price
until you get up and threaten to leave.
Lessons from buying a car
Once, I wanted to buy my wife a new car.
We went to the dealership
that sold the exact type of car she liked.
My wife and I went with two friends
who are very knowledgeable about vehicles.
After reviewing and agreeing a car,
we sat down to negotiate.
From the very beginning,
I said, “I’ve been in the auto industry for many years.
I know exactly what percentage of commission
you get from these models
and how much you need to sell them
for to stay out of trouble.
So tell me the best price
and I will decide to buy or not. Okay?”
The salesman smiled and said yes.
Then he offered $30,000 for a car
that I know of another dealer that
still makes a profit selling it for $25,000.
I looked at that number and said,
“Thanks. I’ll do it like this:
I’ll pay $25,000 cash for this car, right now,
in full, including taxes and other formalities.”
When the salesman insisted
that $30,000 was the best he could offer,
we got up and headed to the parking lot.
The salesman ran after me
and said he would talk back to the manager.
After a while,
the salesman came back with a “no better” price.
And so for a few times,
the salesman came back in,
and then came back out,
insisting that it was the lowest price he could offer.
In the end,
they decided to sell me the car for $25,000.
you never know the best price
until you get up and walk away.
You simply have to be brave enough to do it over
and over until it becomes an inherent skill.
It is not your customer’s job to remember you,
it is your obligation and responsibility to make sure
they don’t have the chance to forget you. – Patricia Fripp