Be careful not to telegraph your “tell” 18 June, 2010Posted by varoom in Management, Selling.
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In a negotiation you want the process to be a fair exchange of terms on both sides. Newcomers to the negotiating game often give too much away early on and have a fight to get back to a reasonable position later in the relationship. It’s often impossible to raise a price back to a preferred level once it has been sacrificed in a negotiation.
Just like in poker everyone has a “tell”, some kind of reaction, response or behaviour when in a tight negotiation spot. It’s in your interest not to communicate (telegraph) you’re negotiating pattern in negotiations with a potential or existing customer. One particularly bad pattern is if you always reduce your price when demanded, or accept a price reduction every contract or accept claims of competitive price pressures that you need to keep ahead of.
The best pattern to telegraph is one of inconsistency, on some occasions resist pressures to concede, on others exchange one concession for another given by the other party, on other occasions agree to concessions out right. But always remember when giving a concession make sure you always get something in return, increased volume, earlier orders, broader product range purchases, publicity, even better market information is valuable to you but maybe of little cost to the other party. Also in reverse sometimes a fair exchange from you is a reasonable explanation of why you can’t give a concession. In many cases the other party is ignorant of the challenges of making your product, maybe they don’t fully appreciate the true value, to them, of what you are delivering. In some negotiations the target of shaving a few more percentage points off the price becomes the challenge when in the scheme of things it make very little difference when the customers business potential is taken into account.
Don’t be afraid to negotiate, play your game like a good poker player, avoid telegraphing your “tell” and make sure to get something in return for every concession you make.