In the Restaurant

Carl RITCHIE: Fortunately my management did finally agree to that price of $200,000. By insisting on a very specific price, you closed down the negotiations.

Margaret PEAKE: Closing down negotiations is still negotiating.

Carl RITCHIE: Were you bluffing?

Margaret PEAKE: No, not really. I had an attractive proposal from one of your competitors. I really did want to do the deal with you, but I had no reason to bend over backward to help you. That’s why I set a price at which I’d give you the deal and left it up to you.

Carl RITCHIE: How should I respond in similar circumstances?

Margaret PEAKE: To start with, there are three things that you must not do, three temptations to resist.

Carl RITCHIE: Let me guess. One: Give it up as a lost cause. I’m paid to hang on until the bitter end.

Margaret PEAKE: Yes, and yet there can be a really strong temptation to give in to your pride and stalk out of the room.

Carl RITCHIE: Two: Accept the price demanded without any conditions.

Margaret PEAKE: That makes the other person think that your final offer was not really your best offer. It will encourage him to impose even harsher terms on you the next time you’re negotiating.

Carl RITCHIE: What’s the third temptation to resist?

Margaret PEAKE: The biggest mistake you can make is to offer an average concession in the hope of mollifying the other person.

Carl RITCHIE: Did I err in offering to reduce my price to $208,000, then?

Margaret PEAKE: To be frank, you did. You reduced your negotiating margins without getting anything in exchange. When I had just stated that my “final offer” was $200,000, what made you think that I’d agree to pay $208,000 a few moments later?

Carl RITCHIE: What should I have done, then? I had absolutely no room for maneuver.

Margaret PEAKE: In negotiations it only ever seems that there’s no room for maneuver.