Margaret Peake’s Office, 10 Years Earlier

Carl Ritchie is feeling ill at ease. He has been forced to wait for almost an hour in a small, overheated room before being allowed into the buyer’s office. Once there, he has been obliged to sit on a low, uncomfortable chair. There’s nowhere for him to put his documents. While she files away a few papers, Margaret Peake explains in a distant manner, “I can only spare you a little time today. As you are surely aware, I’m under a lot of pressure, particularly from your competitors, whose prices are much more attractive than yours. What’s your best offer?”

Carl Ritchie tries to slow things down, asking how business is going and about trends in the market, but the buyer cuts him short: “Let me be clear. There’s a 5% disparity between your proposal and the price offered by your main competitor. Let’s stop beating about the bush. Just tell me whether you can get close to that price.”

Carl Ritchie hesitates. The price quoted is his absolute bottom line and one beyond which he definitely cannot go. He considers this, then says, “No, I’m afraid I can’t.”

Margaret Peake approaches him and says, “I’m sorry to have to tell you this, but if you don’t win this contract you are very unlikely to win another from us. I doubt that your senior management would appreciate losing a customer like us overnight. Am I making myself clear, Mr. Ritchie?”

Finally, she adds, “I’m presenting this deal to our board this evening, so I shall need an immediate response from you.”

Carl Ritchie tries to play for time and claims that he will need to discuss the issue with his line management. “You can use my phone, Mr. Ritchie. Please go ahead! Or, if you prefer, I’ll give you time to call on your cell.”

Carl Ritchie realizes that his only option is to back down. He attempts to offer a 3.5% price cut, but the buyer sighs, “Please be serious, Mr. Ritchie; you must offer at least 4%.”

Somewhat discouraged, Carl Ritchie quietly agrees. Margaret Peake smiles at last, looking visibly satisfied to have won the day: “I shall sign the purchase order this afternoon. You see, Mr. Ritchie, you’ve won your contract!”

Carl relaxes. All the time spent hanging around has not been in vain. Anyway, he really needed to clinch this deal to “get one over” on the competition. Now it is done and he can start planning for the weekend. The buyer is getting ready to stand up to escort Carl to the door. Then she pauses for a moment and seems to be trying to think of something. With a smile, she asks, “Of course, you’ll grant us a 2% discount at the year’s end, won’t you?”

Carl is startled: “Why? We’ve not even discussed that!”

The buyer sits down, looking disconsolate: “Well, in that case, I’m afraid that we’ll have to go back to the beginning.”

Carl Ritchie feels cornered and frustrated. He opts to call for a break in the discussions and suggests that they reconvene for special negotiations about the terms of the contract. As she accompanies him to the door, Margaret Peake tries to reassure him: “Most of the work is done, Mr. Ritchie. We are agreed about everything except this discount issue, which is a key point for me. I’d really like to help you out, but in all sincerity, I can’t give ground on that.”

Once he is back in his car, Carl’s hopes rise again. If he makes a good case to his sales manager, he should be able to get his customer the discount that she requires.