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Tactic # 92 - One Foot on the Dock
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. Finally
the loan officer of one bank, pushed to his limits, tells the building
owner that if she does not sign a letter of intent to lock her loan in
at 8 percent by Friday at 5:00 pm, the rate will go up to 8.13 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 8
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 8 percent interest rate, there is no need to continue
the negotiation.
Ask the
Negotiator
Dear
Master Negotiator
I am talking to a customer about a particular technology solution and
have brought in a specialist consulting company to assist. I have
nothing more than a basic, mutual non-disclosure agreement with the
consulting company.
This document doesn't outline commercial terms but we have agreed
verbally that they will pay me 10% of their gross profit for the
introduction. On this basis I have revealed the customer name. They now
say that they had approached that customer before and because of that
the 10% will need to be re-negotiated. How do I maximise my margin on
the deal?
Regards
Simon
Dear Simon,
This is a relationship that is not starting off very well. I might start
by using the strategy of asking them a few great questions, like...
What happened when they approached the client in the past? What was the
reason they were not awarded any previous work from your client? Did
they put a formal proposal into this client on the exact same work that
you referred them to? What is their long-term goal in their relationship
with you? Would they like any additional referrals?
My reasons for asking these questions is to lead the contractor to the
point that the reason that they will now get work from your client is
because the client trusts you and your recommendations. What is that
trust and the introduction to your client worth? My feeling is it is
worth at least 10 percent of what they bill. If this consulting firm is
in business for the long-run, and they do want additional referrals, you
might then add, with those goals, is sounds like the right thing to do
is honor our initial agreement.
Last, you have learned the hard way about another negotiable deal point
that needs to be put into a referral contract. But, before you go to
write an extensive contract, it may be easier to find a reputable
consulting firm that honors their word. Life is too short to work with
dishonorable people.
Peter
Ask the
Negotiator - Are you involved in a
negotiation and not sure what strategies or tactics to use?
Send in your toughest negotiation
challenge and our team of expert negotiators will outline a specific
plan to ensure your success. Please send your negotiation
challenge (please put Negotiation Challenge in the subject
line) to patti@pbsconsulting.com.
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of The Only Negotiating Guide You'll Ever Need, by Peter
Stark and Jane Flaherty ($14.95 retail.)
To view the latest issue of The Master
Negotiator, the premiere on-line newsletter for negotiators,
follow this link:
The Master Negotiator, Volume 2, Number
11 The Fifteen Rules Every Negotiator Must Know
To view previous Negotiating Tactics of the Week,
follow this link:
Negotiating Tactics of the Week
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