The Negotiation Game - Part Four
The Third Golden Rule - Concede Small
Let us discuss the third golden rule of the negotiation game.
3) Concede small
You would ideally need to negotiate with the Russians one day to fully understand the importance of this golden rule.
The concession pattern tells a “patient” negotiator so much about his opponent's situation and negotiation style.
The salesman in the antique shop went from £499 to £200 in one go; he reduced the price by 60% in the first instance. Are there more concessions to come? You may ask... of course there is.
Now what about the salesman’s situation? You could safely assume that the item in question couldn’t have cost him more than third of what he is asking now and that my £90 offer was still making him a small profit or he wouldn’t have continued or even for that matter started the negotiation.
A reasonable return for him in this case would be 50% and hence my offer of £110 was what he would be comfortable to accept, albeit not a great deal for him.
If the sales man said from the outset that he couldn’t go less than £400 which is a reduction of 20% as the first concession, how much do you think I could have settled this for?
The answer would have been around £190. Why? Going by the “third of the asking price cost rule” for his industry, the table would have cost him about £130, adding 50% (to make his margin) would then have been around £190 pounds.
Finally a word about his "opening Gambit"; £499 was his aspiration in the first place and it is important that such a demand should be ignored by the negotiator and hence the initial "politeness" and "humbleness" that one should show to find the truly acceptable aspiration of the seller.
I hope you found this article of help and fun.
OK... Now you can watch this Video clip of Osama El-Kadi talking about Negotiation in a major sales conference in London.
There you go, the ABC of the negotiation game:
1) Aim Big
2) Be Patient
3) Concede Small
The ABC of the Negotiation Game.
By Osama El-kadi 2008
ABC of The Negotiation Game - Part One
The Three Golden Rules of the Negotiation Game introduction to the section.
ABC of The Negotiation Game - Part Two
The First Golden Rule of the Negotiation Game - A
ABC of The Negotiation Game - Part Three
The Second Golden Rule of the Negotiation Game - B
ABC of The Negotiation Game - Part Four You Are Here!
The Third Golden Rule of the Negotiation Game - C
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