Corporate Finance, DeFi, Blockchain, Web3 News
Corporate Finance, DeFi, Blockchain News

Put time on your side

Just like sales people look for “the close” when trying to reach a deal with their prospects, as the customer you must manage the time spent during negotiations and as Kenny Rogers so eloquently said “no when to close them.” Time is a strategic tool for any successful negotiation and must be used in order to move the negotiation in your intended direction, to either speed up or slow down the process.

Shawn Casemore
Shawn Casemore
There are three ways in which time can be used to impact the outcome of a negotiation:

- Provide for consideration: Years ago my wife and I wanted to buy a couch and love seat. We set out to make the purchase and found the perfect set at our first stop. Despite the list price of $2800 plus tax, we offered a price of $2500 tax included (furniture often has a 30% or greater markup). The sales person refused our offer and after thanking her for her time, we left. We spent the day travelling across Southern Ontario attempting to find another set, but found ourselves returning to our first stop, with our proverbial tail between our legs, ready to pay full list price. As I approached the salesperson she quickly said, “Mr. Casemore, I am so glad you came back. I had another chance to speak with my sales manager and he agreed to sell you that set for $2500 including tax and delivery.” Well, am I ever glad I let her speak first! By walking away while still remaining polite and positive, the sales person (and her management) decided that a reduced mark-up was more desirable than no sale at all.
- Drive a sense of urgency. Do you know when the best time is to buy a car? Typically it is late in the day, during the last week of the month. If you are able to wait until January or February, even better. For most, the urgency to sell a car (and other goods or services for that matter) increases as the end of the month approaches, with commissions riding on closing those last minute deals. The sense of urgency on the part of the sales team to close the deal increases, which swings the power heavily in your favor. Wait an additional week to make your final decision (i.e. first week of the month) and your leverage will be considerably reduced. Use time to drive a sense of urgency, and increase your chances of a preferred outcome.
- Determine the true value. How much is your time worth? What is the chance that the individual you are negotiating with reaches the point where they will no longer negotiate because they have reached a point where their investment of time is no longer worth the value of the sale? This can, and does happen, even to yours truly. Consider how much time the sales person has put into closing the deal, one year of taking you for lunch, or a cold call that caught you at a weak moment. Be conscious of the value of your sale versus the value of the sales person’s time. Have you been trying to negotiate $10 off the price for a month? Chances are you will be unsuccessful. How badly do you need this product or service and what is the value of your “downtime” without it? Remain conscious of time invested into negotiations for you’re yourself and the seller and you will significantly increase your ability to leverage and manage the outcome.

Supply Strategy:

This week’s challenge is to develop a sense of urgency during the negotiation for a good or service that you can readily buy elsewhere. Think about something that is commoditized, such as office supplies, computer hardware or paint, and then follow these steps:
- Determine your optimal outcome. Your best offer.
- Identify an acceptable outcome. Your counter offer.
- During the negotiation make your initial best offer (I.B.O.)
- If this is not accepted, listen to the counter offer provided to you.
- If the counter offer is not close to your second (counter) offer, suggest, “The best I can offer you is…”
- If this is not accepted, thank the person for their time, provide them with your contact information (i.e. business card), and walk away.

If you use this technique correctly you have a 75% chance the salesperson will contact you to either accept your counter offer, or offer something that is significantly better than their last offer. The key however is to be prepared with your first and second offer; be polite and courteous (emotions have no role to play in effective negotiations); and walk-away if your offers are not accepted.

Try this approach and see the shocked look if you actually reach the point of walking away. We will discuss how to deal with counter offers next week!

Good luck!

Shawn Casemore, President, Casemore and Co.

Put time on your side

Lundi 2 Juillet 2012