Summary: Increasing penalties if the counterpart does not make a decision.

This tactic, which is similar to No More Mr. Nice Guy, is useful when a counterpart starts making unreasonable demands or causing excessive delays in the negotiation. You start taking punitive action, creating the feeling that your counterpart has One Foot on the Dock and the other foot in the boat—and the boat is slowly moving away from the dock.

Example
The owner of a commercial building decides to refinance her property since interest rates have dropped significantly. She is negotiating with two banks to try to get the most competitive rate. Using the Power of Competition, she keeps gaining concessions from both banks. Pushed to his limits, the loan officer of one bank finally tells the building owner that if she does not sign a letter of intent to lock her loan in at 5.75 percent by Friday at 5:00 pm, the rate will go up to 6.00 percent on Monday at 8:00 am.

Counter

The easiest counter for the building owner would be to utilize These Boots Are Made for Walking, concentrating her negotiations on the other bank she is already working with or opening negotiations with a third bank. A second effective counter would be the Trade-off Concession. She could agree to sign the letter of intent at 5.75 percent if the bank will waive the appraisal fee. Finally, she could employ the Calling Your Bluff tactic, telling the loan officer there is no way she can make a commitment by Friday, so if the bank cannot hold the 5.75 percent interest rate, there is no need to continue the negotiation.

Have you used or encountered this tactic in your negotiations? If so, how’d it go?