The way in which you give away that $1,000 is
very critical. There are several mistakes that you should avoid:

Equal-sized concessions. This means giving away
your $1,000 negotiating range in four increments of $250. Imagine
what the other person's thinking if you do that. She doesn't know
how far she can push you. All she knows is that every time she
pushes she gets another $250, so she's going to keep on pushing.
In fact, it's a mistake to make any two concessions of equal size.
If you were buying the car, the owner made a $250 concession,
and when pushed made another $250 concession, wouldn't you bet
that the next concession would be $250 also?

Making the final concession a big one. Let's say
that you made a $600 concession followed by a $400 concession.
Then you tell the other person, "That's absolutely our bottom
line. I can't give you a penny more." The problem is that
$400 is too big a concession to be your final concession. The
other person is probably thinking that you made a $600 concession,
followed by a $400 concession, so he's sure that he can get at
least another $100 out of you. He says, "We're getting close.
If you can come down another $100, we can talk." You refuse,
telling him that you can't even come down another $10, because
you've given him your bottom line already. By now the other person
is really upset, because he's thinking, "You just made a
$400 concession and now you won't give me another lousy $10. Why
are you being so difficult?" So, avoid making the last concession
a big one, because it creates hostility.

Never give it all away up front. Another variation
of the pattern is to give the entire $1,000 negotiating range
away in one concession. When I set this up as a workshop at my
seminars, it's amazing to me how many participants will turn to
the person with whom they're to negotiate and say, "Well,
I'll tell you what he told me." Such naiveté is a
disastrous way to negotiate. I call it "Unilateral Disarmament."

So you're thinking, "How on Earth would a
person be able to get me to do a stupid thing like that?"
It's easy. Someone who looked at your car yesterday calls you
up and says, "We've located three cars that we like equally
well, so now we're just down to price. We thought the fairest
thing to do would be to let all three of you give us your very
lowest price, so that we can decide." Unless you're a skilled
negotiator, you'll panic and cut your price to the bone, although
they haven't given you any assurance that there won't be another
round of bidding later.

Another way that the other side can get you to
give away your entire negotiating range up front is with the "we
don't like to negotiate" ploy. Let’s say you're a salesperson
trying to get a new account with a company. With a look of pained
sincerity on his face, their buyer says, "Let me tell you
about the way we do business here. Back in 1926, when he first
started the company, our founder said, 'Let's treat our vendors
well. Let's not negotiate prices with them. Have them quote their
lowest price, and then tell them whether we'll accept it or not.'
So that's the way we've always done it. So just give me your lowest
price and I'll give you a yes or a no. Because we don't like to
negotiate here." The buyer is lying to you. He loves to negotiate.
That is negotiating-seeing if you can get the other side to make
all of their concessions to you before the negotiating even starts.

Giving a small concession to test the waters.
Giving a small concession first to see what happens tempts us
all. You initially tell the other person, "Well, I might
be able to squeeze another $100 off the price, but that's about
our limit." If they reject that, you might think, "This
isn't going to be as easy as I thought." So you offer another
$200. That still doesn't get them to buy the car so in the next
round you give away another $300 and then you have $400 left in
your negotiating range, so you give them the whole thing.

You see what you've done there? You started with
a small concession and you built up to a larger concession. You'll
never reach agreement doing that, because every time they ask
you for a concession, it just gets better and better for them.

So all of these are wrong because they create
a pattern of expectations in the other person's mind. The best
way to make concessions is first to offer a reasonable concession
that might just cinch the deal. Maybe a $400 concession wouldn't
be out of line. Then be sure that if you have to make any future
concessions, they're smaller and smaller. Your next concession
might be $300, then $200, and then $100. By reducing the size
of the concessions that you're making you convince the other person
that he has pushed you about as far as you will go.

If you want to test how effective this can be,
try it on your children. Wait until the next time they come to
you for money for a school outing. They ask you for $100. You
say, "No way. Do you realize that when I was your age my
weekly allowance was 50 cents? Out of that, I had to buy my own
shoes and walk ten miles to school in the snow, uphill both ways.
So I would take my shoes off and walk barefoot to save money (and
other stories that parents the world over tell their children.).
No way am I going to give you $100. I'll give you $50 and that's
it."

"I can't do it on $50," your children protest in horror.

Now you have established the negotiating range.
They are asking for $100. You're offering $50. The negotiations
progress at a frenzied pace and you move up to $60. Then $65 and
finally $67.50." By the time you've reached $67.50, you don't
have to tell them that they're not going to do any better. By
tapering your concessions, you have subliminally communicated
that they're not going to do any better.

Key points to remember:

1. The way that you make concessions can create a pattern of expectations
in the other person's mind.

2. Don't make equal size concessions because the other side will
keep on pushing.

3. Don't make your last concession a big one because it creates
hostility.

4. Never concede your entire negotiating range just because the
other person calls for your "last and final" proposal
or claims that he or she "doesn't like to negotiate."

5. Taper the concessions to communicate that the other side is
getting the best possible deal.

About The Author:

Roger Dawson is a professional speaker and the author of two of
best selling books on negotiating: Secrets of Power Negotiating
and Secrets of Power Negotiating for Salespeople, both published
by Career Press. He was inducted into the Speaker Hall of Fame
in 1991. You can contact him at rogdawson@aol.com. Roger’s
website is www.rdawson.com.

You can visit our website at www.salestrainingcamp.com
to purchase Roger’s audiotape series Secrets of Power Negotiating
for Salespeople.

Contact Information:

Roger Dawson's Power Negotiating Institute

1661 Hanover Street, Suite 215

City of Industry CA 91748.

Phone: 800-932-9766

DawsonProd@aol.com

www.rdawson.com

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