The point of acquiescence and when should you walk away from a great deal?
Every transaction in life reaches a point of acquiescence. Whether it is haggling over who empties the dishwasher, buying a Fender Telecaster on EBAY or finalising a multi-million dollar contract to supply light armoured vehicles to the Australian government. At some stage in the whole giddy process, an acknowledgement is made. That acknowledgement, of course, does not inevitably always consist of a handshake, congratulations and a mutually beneficial long term relationship. More often than not, the point of acquiescence in a negotiation is the recognition that a deal cannot be done.
The reasons for reaching such a conclusion are numerous. They can range from the simple (too expensive) to the sublime (a better deal can be had elsewhere and main competitor #1 has lost out too) to the ridiculous (a dislike of the sales reps’ personal hygiene) and to all points in between. One of the challengers any procurement or negotiating professional faces is managing the timings of a deal.
Timing is Everything in Negotiations!
Timing is everything in negotiations, it influences the outcome almost as much as any other factor. The supply/demand dynamic is a natural and logical factor but so is the time of day, week, month & of course, year. The more flexible you can be around timing of your negotiation, the greater scope for securing leverage you have. Understanding the internal and external pressures on your negotiation counterparts calendar can be crucial. A little research on sales cycles, bonus criteria and reporting dynamics can deliver incremental benefit.
A good example of taking this to a deeper level is as follows: One of the most proficient negotiators I have ever had the ‘pleasure’ of dealing with would log the day & time of every negotiation decision by seller/supplier. He fairly swiftly built up a clear picture of the best (and indeed the worst) times to push for a deal. e.g.: Supplier A+, would never agree a deal on a Monday or a Friday. However, they would be 3 times more likely to agree to a more beneficial deal on a Tuesday morning and twice as likely again to wrap up negotiations within the second half of the month! Whereas Supplier B-, would be far more likely to conclude deals on a Friday morning.
Of course, the variables at play in many negotiations might make such analysis a little bit too time consuming to justify basing a whole sales/procurement strategy on it. However, as so many deals these days are ranked on the smallest of differentials, such study might make the difference between a +/+ deal and a -/+ deal. And, of course a -/+ (loss/win) deal can in some cases be career defining and growth limiting. So, how can a negotiator hope to redress the balance at all?
Is It Worth Paying Slightly More?
Well, the recognition that every deal should have the potential to benefit both parties is invariably not a bad place to start from. A deal that will harm your own business is instinctively one that most negotiators will steer clear from. However, it depends how long the pain is set to last? Paying slightly more for a service that can be got cheaper elsewhere might seem counter-intuitive for career growth. And yet, short term investment in a potentially long term solutions partner can reap significant rewards over a sustained period. Whereas an ‘on-paper’ great deal could bring about major long term harm to a business should it impact on quality, supply, the environment, financial viability of the provider and a whole host of other possible considerations.
Concede or Accept?
All of which brings the variables at play when contemplating the point of acquiescence into sharp focus. Is it time to concede for the benefit of both sides? Is it time to accept that this is a good deal? Or is it time to walk away from a great deal that could ultimately ruin both sides?
Oh the joys and the challenges of procurement!
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