“Take It or Leave It”: Game Over…or Is It?
Your counterpart’s objective is to reduce your defensive options. You apparently cannot take your arguments any further because your counterpart does not even want to discuss them. And it seems impossible for you to move to the middle ground because your opponent is refusing all compromise in advance. The three most obvious escape routes also lead to dead ends:
- Whether through pride or discouragement, the first instinct is often to break off the negotiations. While it is true that your counterpart may then sometimes take the initiative to seek reconciliation (see the “fake exit” tactic explained later), there is a great risk of losing a deal that could still be done.
- Giving in to pressure is the second obvious option. If the price demanded by your counterpart is within limits that are acceptable to you, you will be tempted to swallow your pride and seal the deal on the terms imposed on you. But that means you obtain nothing in return for your concessions, and if you should have further negotiations with the same person in the future, it may encourage him into very bad habits.
- When you cannot accept the terms laid down by the other party, giving a concession is the third temptation. But this means weakening your position, and generally with no guarantee that you will have the satisfaction of clinching the deal or of winning the slightest concession in return.
Thus you are apparently faced with deadlock. However, deadlock itself constitutes a playing field. Your counterpart has set a price and indicated that it is a “take it or leave it” proposal. Your immediate problem is not “How can I get my opponent to accept a higher price?” but “How can I put my opponent in a position in which he will be prepared to reopen discussions about price?” Ultimately there are only two obstacles, and these are questions in your counterpart’s mind:
- “Would it serve any purpose to reopen the debate, as I think I’ll get an agreement on the terms that I’ve just quoted?”
- “How can I reopen the debate without losing face?”
It is often necessary to help your counterpart answer the first question. Allowing him to resolve the second issue is almost always essential.
There are five types of tactics that can be employed, depending on whether you want to deny there is a deadlock or gain some time, destabilize, or negotiate.
Denial Tactics
Not treating your counterpart’s quote as a “take it or leave it” price gives her the option to negotiate another price without losing face. For example, if you are the seller and you feel that the buyer is trying to intimidate you (“I won’t pay a penny more”) but is not completely sure of himself, you can try one of the four denial tactics:
- Ignoring, in which case the discussion continues as if nothing happened
- Buyer: I’m prepared to go as high as $100, but I won’t pay any more than that.
- Seller: Can we go back, just for a minute, to what you were saying previously? On a technical level, you were wondering whether…
If the buyer does not repeat the $100 price, you can assume that the negotiations remain open.
- Reformulating the price asked by the customer as a mere “aspiration”
- Buyer: I’m prepared to go as high as $100, but I won’t pay any more than that.
- Seller: Yes, I understand that ideally you’d like a price of about $100. I’ve noted that. Of course, I can’t drop that low, but I’m sure that we’ll be able to reach an agreement.
- If the buyer does not react, the seller is free to argue his case and to pursue the negotiations. The buyer will be able to suggest or accept a bid of more than $100 without losing face.
- Offering the buyer an escape route
- Buyer: I’m prepared to go as high as $100, but I won’t pay any more than that.
- Seller: Yes, I understand. Of course, I can’t drop that low, but I understand that you are adopting a firm position because I think my explanations were rather unclear and I may have omitted to mention an important issue.
- The seller thereby takes responsibility for the “misunderstanding” and can then rephrase and clarify aspects of his proposal, thereby allowing the buyer to seize the opportunity to revise her price proposal without losing face.
- Arguing your case
- Buyer: I’m prepared to go as high as $100, but I won’t pay any more than that.
- Seller: That would indeed be a standard price for a standard product, but this product is in a category of its own and I’m going to convince you of that. For example, let’s take…
The seller has heard the price quoted by the buyer, but has deliberately refused to perceive it as applying to her product. She is gambling that she can win the buyer over with her convincing arguments and persuasive skills. It can work!
On a brief visit to New York a few years ago, I was walking down Fifth Avenue when I was accosted by a street hawker. He was selling, for a few dollars, cheap replicas of luxury watches.
I wanted to take a gift home to one of my children, and from among hundreds of timepieces piled in the hawker’s attaché case my eyes were drawn to a blue watch, a not particularly brilliant copy of a prestigious Swiss watch. I asked the hawker the price and heard him reply, “Seventeen dollars.”
Knowing a little bit about the going rate for such items, I smiled and told the vendor that those watches usually sold for 15 dollars and that I wouldn’t pay a cent more. Against all my expectations, the vendor proceeded to talk up the watch: The midnight blue was an exact color match, the watch had numerous dials and a calendar, the winder mechanism was practically identical to the original, and so on.
Increasingly irritated, I pointed out to him that if I didn’t get a price of 15 dollars from him, I would only have to walk a few meters to get a similar model for 15 dollars from a rival vendor. So he could take my offer or he could leave it. I then proffered two banknotes, amounting to 15 dollars.
At that point the seller opened his attaché case wide, looked me straight in the eye and said, “Look at all these watches, there are about a hundred of them: Take whichever one you want and you can have it for 15 dollars.” Then he pointed at the blue watch and added, “But that one will cost you 17 dollars.”
I paid for the watch without further argument.
Delaying Tactics
It is often extremely difficult to intervene “in the heat of the moment” when the other party has just taken a very firm stance. Not only do you risk acting hastily under stress, and therefore possibly making serious errors, but you also prevent your counterpart from accepting a compromise. When she has just quoted you her “final offer,” what makes you think that she will agree to a higher price a moment later? However, by allowing a little time to pass, you increase your counterpart’s opportunities to justify a softening of her stance, provided that she has been convinced that a compromise is desirable.
Postponing Your Response Until Another Meeting
Whenever possible, you should avoid tackling the problem during the meeting. Postponing your response until another meeting can be justified by a need to consult other people at your company, to reexamine certain working assumptions, or even to simply take the time to think about it.
Seller: I’m prepared to drop as low as $100, but I won’t go any further. You can take it or leave it.
Buyer: I don’t see how we could pay that much. However, to ensure that our counterproposal is as attractive as possible, I need a few days to go over my calculations with the managers concerned. I’ll then be able to come back with a carefully researched proposition.
If the seller does not react, it means that he is prepared to look at a “carefully researched proposition,” which might potentially have a price tag of less than $100. You have done it. You have broken the deadlock. If the seller stresses that his price limit is $100, that will not necessarily prevent him from taking into account, a few days later, new information that the buyer has provided, to “give a little ground” to the buyer, in return, by revising his stance on pricing.
Isolating the Cause of the Deadlock
Seller: I’m prepared to drop as low as $100, but I won’t go any further. You can take it or leave it.
Buyer: Yes, I’ve noted that. Of course, I can’t go that high, so we’ve got a problem to resolve here. I suggest that we leave that on the back burner for now and start by looking at all the other features of your proposal.
Depending on what is said on those other issues, the seller may find it easier to revise her stance on pricing without losing face: “In view of the information that you’ve given me, I’m prepared to come down to…”
Getting Other People Involved
Seller: I’m prepared to drop as low as $100, but I won’t go any further. You can take it or leave it.
Buyer: Yes, I’ve noted that. Of course, I can’t go that high, so we’ve got a real problem and you’re right to stress its importance. To sort it out, it seems to me that we need assistance from…”
If the buyer wants, he can be more specific: “my boss and yours, because this is a really important decision so they’re bound to have some ideas” or “our engineers, as we need to look at technical issues in greater detail to pin down the overall costs,” and so on.
A third-party intervention can allow you to adopt a different approach to the issue and find new solutions. Obviously you need to do this in such a way as not to rub the seller the wrong way. Rather, it is a matter of giving your counterpart a boost by showing that you are going to deploy all your expertise to support him and to deal with the problem that has been raised.
Destabilizing Tactics
Destabilizing is not an end in itself, and it can even be quite dangerous, as your counterpart’s reactions are not completely predictable. However, in a situation of complete deadlock, it may sometimes be necessary to disrupt your opponent’s way of thinking to open him up to arguments or solutions that he would instinctively dismiss.
There are numerous methods at your disposal for destabilizing a negotiator in a situation of deadlock. All involve adopting unpredictable behavior that radically changes the relationship established by the other party, under which he dictated terms and waited for you to accept them. Here are a few examples.
The Fake Exit
Buyer: I’m prepared to go as high as $100, but I won’t pay any more than that. You can take it or leave it.
Seller (putting his papers away, looking regretful): Speaking personally, I came to reach a reasonable agreement. I respect your point of view, but under these conditions, I’m afraid it’s pointless to continue.
Buyer: Wait! Perhaps we could reach an understanding somehow?
The fake exit may surprise your counterpart and make her instantly aware that she has gone too far. If she wishes to reach an agreement, she will stop you and very quickly change her negotiating methods. Subsequent phases of the negotiations will work to your advantage, as you will feel that the “cursors of power” have changed sides. Of course, you will need to ensure that you offer your counterpart some tokens of respect and esteem to avoid upsetting her, which could jeopardize the chances of concluding the negotiations successfully.
However, you need to be careful that a fake exit does not become a real exit if your opponent sits stony-faced in response. You must therefore deploy the “Columbo effect” to announce, with your hand on the door handle, that you will be back if any other issues or ideas should arise.
Unsettling Questions
Buyer: I’m prepared to go as high as $100, but I won’t pay any more than that. You can take it or leave it.
Seller: Where did you get that price from?
Buyer (self-confidently): I’ve had an excellent offer at that price.
Seller: And if we matched the price, who would you choose?
Buyer: Oh, if you matched the price, I’d be keen to work with you.
Seller: Why us?
Buyer (embarrassed): Well, you know, the products and services are pretty similar, but let’s just say that our people already know you, so it makes life easier for them.
Seller: If it’s easier for them, it’s safer and more economical, so that clearly justifies a price differential. About 5%, maybe?
Buyer (ever more flustered): No, come on, not 5%.
Seller: I’m sure that you’ve had an excellent quote, but how can you say on the one hand that working with us is easier for your company and then on the other risk changing supplier for a savings of less than 5%? What would happen if you had a problem with that supplier?
Buyer: Well, they do provide a good after-sales service.
Seller: What guarantees do you have that they would act quickly?
Buyer: Their contract, of course.
Seller: In your experience, do all suppliers always abide by their contracts?
Clearly you must be able to stop such an interrogation or it will quickly irritate your counterpart. Once your counterpart has been destabilized, you must rapidly “restabilize” him by presenting strong arguments in his favor and then making some constructive proposals.
The Mystery Bid
Among the greatest poker hands you can play during negotiations is the tactic of the mystery bid.
Buyer: I’m prepared to go as high as $100, but I won’t pay any more than that. You can take it or leave it.
Seller (regretfully): Unfortunately, I can’t match that.
Buyer: It’s up to you. I’ve had an excellent offer from one of your competitors at that price.
Seller: I really would have liked to do this deal. That’s too bad, what a shame.
Buyer: I’m sorry, but you need to be competitive.
Seller (after a brief pause): It’s a shame, because I’d come with a proposal very close to the price that you’re asking.
Buyer (with great interest): Had you?
Seller: Yes, it really is a pity, as I’m sure it’s a proposal that would have interested you.
Buyer: What is your proposal?
Seller (apparently surprised): Why do you ask? I thought $100 was a completely nonnegotiable price for you?
Buyer (destabilized): Well, you know, let’s just say that you’ll need to be very close to that price, but we can always talk about that.
Humor
This tactic consists of disarming your opponent with a witty comment when the negotiations are at their most tense. For example, a seller forced to make his umpteenth concession on pricing stands up, discards his tie, unbuttons and removes his shirt under the baffled gaze of the buyer, then announces, “All I have left to give you is the shirt off my back, but I’m going to give it to you because I really want this deal!” Somewhat perturbed, the buyer asks the seller to get dressed again and says, “Right, OK, I think we can leave the price as it is for this year.”
Obviously, humor of this type could have created a very frosty atmosphere and profound unease with other negotiating partners, so you need to be careful. For this to work, you must have a sense of humor, but you also need to have the same sense of humor as the buyer—and even some degree of complicity with him.
For fans of Formula 1, fashionistas, or film buffs, it is often possible to use a private joke to remove the tension at a critical moment:
Seller: You’ve got me hemmed in here like Steve McQueen in the cooler.
Buyer (suddenly relaxed, eyes twinkling, looking for a witty retort): I’m just waiting for you to get on your bike and soar over the barbed wire.
This is guaranteed to be all the more effective if there is a third person in the room, a silent witness, who is incapable of contributing to the subtle rhetorical jousting. A word of caution here: You must be careful to allow your opponent to have the last word.
The Cry for Help
In certain professions, the buyer and seller will know one another well, as they have negotiated with one another dozens of times. The buyer will be careful to keep a certain distance and to sometimes take a hard line during negotiations, but a certain degree of complicity will have developed between them.
In those rare situations of deadlock, you can get behind your counterpart’s “role playing” to appeal to “the person within,” whom you know so well:
Buyer: I’m prepared to go as high as $100, but I won’t pay any more than that. You can take it or leave it.
Seller (looking the buyer straight in the eye): Hang on, Margaret, you’re doing your job and that’s fine, but I have my hands tied here. I’d never be able to get away with that price. We know one another well and it’s not the first time that we’ve disagreed about a problem that needed to be solved, but we’ve always found a way of breaking the logjam when we’ve both put our minds to it. Today is one of those days when I need you to give me a hand, Margaret.
Buyer (awkwardly): Right, I understand, but I’m in a bit of a corner myself, Carl. You must understand that. What do you suggest?
Indignation
Buyer: You can’t be serious, making a proposal like that. I’m prepared to go as high as $100, but I won’t pay any more than that. You can take it or leave it.
Seller: Not serious? What do you mean?
Buyer (rather irritated): I mean some of your competitors are doing better.
Seller (apparently very offended): Not serious? When our company has been in the business for 30 years? When I’ve been in this industry for 10 years and can quote you dozens of customers who’ve thanked me for the seriousness of our work!
Buyer (embarrassed): I know. I don’t doubt that, but…
Seller (eyes fierce with emotion): When I think that our team has worked day and night to prepare this proposal for you, that our top specialists have approved the solutions being offered, that I’ve had personal discussions with the chairman himself to calculate a fair price, I cannot sit here and listen to you say that we’re not serious!
Buyer (trying to play for time): Don’t take it like that. That’s not what I meant.
Seller (calming down): If you say so, but I feel insulted.
Buyer: No, I assure you, you really shouldn’t be.
Seller: I understand that you wanted a better deal on pricing, but can’t we discuss it calmly?
Buyer: Of course we can! I’m open to suggestions.
Indignation is a wonderful way of destabilizing the other person, but it is not generally a tactic. It is precisely when indignation is sincere that it is credible and effective. It is true that you can twist things and exaggerate a little if the circumstances are conducive to that. However, negotiations should not become a drama, even if the acting is top rate.
Negotiating Tactics
As you will better understand now, when the person across the table from you says that you can “take it or leave it,” this does not mark the end of the negotiations; it is merely an episode in those negotiations. You must therefore continue your quest for an agreement, but you must adopt approaches other than haggling over the price, which the other person has rejected in advance. There are several potential negotiating tactics that often follow on from one another.
Deliberately Asking for Something Unacceptable in Return
Buyer: As I said, I’m prepared to go as high as $100, but I won’t pay any more than that. You can take it or leave it.
Seller: I can’t agree to that, I’m afraid.
Buyer: It’s up to you. I’ve had an excellent proposal from one of your competitors at that price.
Seller: I’m keen to offer you the most attractive proposal that I can. For your part, would you be prepared to commit to a significantly higher volume, let’s say 150 tons?
Buyer: No, that’s not a serious option.
Seller: I’m not so sure. If suitable measures are put in place, I believe such a volume might be feasible for you.
Buyer: Maybe. But your competitor isn’t asking me to commit to such volumes.
Seller: But how long would it take you to get through 150 tons?
Buyer: I’ll say it once more, there’s no way I’ll commit to such a volume.
Seller: Right, I understand. As you no doubt understand, I cannot offer the sort of price you quoted a minute ago. Now, how can we find a reasonable solution?
The buyer will not agree to offer this concession in exchange and the seller knows it. But the seller is back on the offensive, as it is he who has control of the debate. When one negotiator waives his demand for something unacceptable in exchange, the other can also waive her “take it or leave it” conditions without losing face, and the negotiations can continue.
Seeking a Realistic Recompense
Buyer: We’ve discussed this enough. I must repeat, I’m prepared to go as high as $100, but I won’t pay any more than that. You can take it or leave it.
Seller: That’s an extremely low price.
Buyer: It’s up to you. I’ve had an excellent proposal from one of your competitors at that price.
Seller: I don’t see how I can come close to matching it.
Buyer: In that case, I’m afraid it’s the end of the road for our negotiations.
Seller: If we could find something to lighten our cost burden for this transaction, maybe that would allow me to make another proposal on pricing.
Buyer: I’m listening.
Seller: Would you be prepared to look again at the product ordering and carriage terms, so that we could make some savings on logistics costs?
Buyer: Within certain limits, why not?
Seller: Right, here is what I’m proposing.
Thanks to this quest for something in return, the seller has succeeded in reopening a debate that seemed to be closed. Depending on whether the buyer’s $100 price demand is realistic and on the value of the recompense agreed to by the buyer, the seller may be able to move a little or a lot closer to that price.
Nevertheless, even if you obtain some recompense, you are strongly advised not to accept the price you’ve been quoted too quickly. The other person might believe that he was insufficiently ambitious in his negotiating stance and might hesitate to seal the deal.
Moving the Goalposts on Concessions
Seller: I must repeat, I’m prepared to go as low as $100, but I won’t go any lower. You can take it or leave it.
Buyer: I’m afraid I can’t agree to that price.
Seller: I’m sorry, but that’s up to you.
Buyer: There’s nothing more I can do regarding the price.
Seller (interrupting): We’re not going to be able to do a deal on those terms.
Buyer (picking up seller’s idea): There’s nothing I can do about the price, but I’ve got an idea to put to you, a solution that might be more attractive to you. Can I tell you about that?
If the seller accepts, she is agreeing to reopen the negotiations that had just closed by quoting a “take it or leave it” price. The buyer can then look for some recompense before offering a concession in an area other than that targeted by the seller.
Complicating the Problem
A good way to give deadlocked negotiations a new impetus is to start again on a different basis, one that is sufficiently complex to encourage the other party to consider and discuss the issues.
Buyer: I must repeat, I’m prepared to go as high as $100, but I won’t pay any more than that. You can take it or leave it.
Seller: I came with a new proposal. While it doesn’t exactly meet the $100 price, it is very close to what you want. Can I put that proposal to you?
Buyer (after a moment’s hesitation): Go ahead.
Seller: This proposal represents a new basis for our discussions. It has a new starting point.
Buyer: Yes…
Seller: This proposal assumes that you offer us a certain number of items in exchange for our concessions, namely (lists 14 items claimed from buyer).
Buyer: I’ll never be able to agree all that. Some items are possible, others are not, and then there are others where I’d need the agreement of other people at our company.
Seller: Naturally, it’s a basis for discussion.
Buyer: Yes, but how about the price?
Seller: The price would be set at $103.50 instead of $108 as quoted in our previous proposal.
Buyer: That’s still too high. I told you that I didn’t want to pay more than $100.
Seller: It’s a new basis for discussion. I ask you to give me a very specific response regarding the items that we’ve asked for in exchange, and depending on that, I’ll be able to quote you a definitive price.
The buyer has reopened the negotiations on a new basis, and a compromise becomes possible once again.
Presenting a Final Offer
Buyer: I must repeat, I’m prepared to go as high as $100, but I won’t pay any more than that. You can take it or leave it.
Seller: I can’t agree to that, I’m afraid, but I’m going to make a concession, too, in the form of one final offer. Subject to a 20% advance payment on ordering, I’m prepared to go the extra mile on pricing. You’re asking for $100, I was quoting $103, so let’s compromise on $102. I hope you can agree to that?
Buyer: You have a deal, Mr. Ritchie.
All negotiations require reciprocal concessions. Even the toughest negotiators know that. Never lose hope that your counterpart will offer you a concession, and above all, always display great confidence when you make a proposal to your counterpart, as if the concession you are demanding is a mere formality. Other than that, you have to accept a few risks.
This scenario takes place on the top floor of a Manhattan skyscraper. Accompanied by her chairman, the sales director of a British company is presenting a multimillion-dollar proposal for a strategic project to the board of a multinational.
On the plane, the sales director summed up her strategy: Give no more than 3% on the price, despite the customer’s ultimatum demanding a 5% discount, framed as a “take it or leave it” offer. The chairman was perplexed. In the taxi he was still dubious: “Don’t risk losing this deal. Offer them 5% if necessary.” The sales director was intransigent: “Trust me, 3% will be enough to seal the deal.” In the foyer, the chairman remained unconvinced, but the sales director stuck to her guns: no more than 3%!
In front of the board, the chairman announced, “We have reviewed all our calculations, we have renegotiated with our suppliers, we have squeezed all our margins, and I must tell you that our final offer is a 3% reduction.”
A frosty silence descended upon the boardroom. Then the board members, visibly disappointed by the proposal, engaged in their own vigorous debate, which the two British negotiators struggled to overhear. The chief executive officer of the customer corporation finally called for silence. With a steely look, he closed his file, buttoned up his jacket, and declared, “Ladies and gentlemen, it is all quite clear to me. There’s no point in discussing this any further.”
The sales director’s heart sank through the floor. Why had she been so insistent on offering no more than 3% when her chairman was prepared to grant the customer a 5% discount? Why had she taken the risk of losing such a crucial deal? Would her chairman forgive her for such a disastrous error? She dropped all these self-recriminations when she saw the customer coming toward her with a smile on his face, saying, “There’s no point in discussing this any further. It’s a fair price and you have a deal.” The sales director almost had a heart attack.
In the taxi to the airport, she had barely recovered her emotional equilibrium when her chairman leaned over and whispered in her ear, “At the end of the day, don’t you think 2% would have been enough?”