3 ms·

That was one of the first bits of advice in the book "Secrets of Power Negotiation" (something I read because I'm not a very good negotiator): Ask for outrageou

by chops 18y ago

That was one of the first bits of advice in the book "Secrets of Power Negotiation" (something I read because I'm not a very good negotiator): Ask for outrageous concessions, you never know if they'll go for it. Lowball purchases hard and highball sales hard. Don't target what you think someone would rationally pay, just ask something ridiculous, and from there you've established your upper bound, and you'll work down from there. Yet when confronted with a situation like that, I still find myself hesitating (or forgetting I can negotiate at all). It's something I still have to work on. Fascinating story though, eventually charging 16x the cost you were originally charging ($1.2m vs $75k).

jpwagner 18y ago
Just read "starting from no" by Jim Camp. Similar advice...totally recommend it.
nivi 18y ago
Some people (like me) have a problem asking for things. "Hesitation" is why Steve Blank suggests considering hiring a "sales closer" when you get to the customer validation stage (the stage where you are asking for the customer's money). Regarding negotiation, low-balling and high-balling don't make sense in all situations. Especially if you are in a situation where the relationship between the negotiating opponents after the transaction is important. The best book for negotiation is "Bargaining for Advantage" http://bit.ly/HZwdW http://bit.ly/HZwdW. "Getting to Yes" is also great: http://bit.ly/oHSCL http://bit.ly/oHSCL. Avoid any negotiation book with "Power" in the title. =)
- chops 18y ago
  Regarding negotiation, low-balling and high-balling don't make sense in all situations. Especially if you are in a situation where the relationship between the negotiating opponents after the transaction is important. I agree that there are circumstances where high/lowballing isn't appropriate: You don't go to a long-time customer and start negotiating for 10x the cost for the same service. But in the case of a new contract, that highballing will set the course for the following deals. You get more at the start, and the following deals will all follow a similar price-point. Furthermore, by demanding high at the beginning, and then coming down, the person with whom you're negotiating will feel as though he/she "won" the negotiation, due to the huge concessions you made "He was asking a million dollars for a plan and we got him for $250k." My point is you can highball and still have a solid post-negotiation business relationship. I will definitely be checking out your book recommendations though.
- sachinag 18y ago
  You know, this is fascinating. I don't have a trouble closing - I have trouble cold calling and prospecting. In a negotiation, all you have to do is figure out the cost savings/additional revenue for your customer and find the highest acceptable price that's NPV positive for them. That's why healthcare sales people have all these fancy ROI models (built by third parties, wink wink) that they truck into sales meetings. It's much easier mechanically and emotionally to deal with a negotiation; it's much harder to randomly call people and be cursed at/hung up on.
- daniel-cussen 18y ago
  People punish others when asked for too much. After all, asking too much is the etymology of arrogance.
Brushfire 18y ago
This is good advice if you never have to deal with the person again. In other words, this is the advice used by used car sales people, etc. In normal business negotiations this is very bad advice. Using tactics that ask for ridiculous concessions paints you as either stupid or manipulative. This type of attitude will get you classified as an asshole, and customers/vendors wont ever want to deal with you again. Negotiating a single deal with outrageous outcomes is not as important (for most businesses) as negotiating 200 deals successfully with the same customer.

by chops 18y ago

jpwagner 18y ago

Just read "starting from no" by Jim Camp. Similar advice...totally recommend it.

nivi 18y ago

Some people (like me) have a problem asking for things. "Hesitation" is why Steve Blank suggests considering hiring a "sales closer" when you get to the customer validation stage (the stage where you are asking for the customer's money). Regarding negotiation, low-balling and high-balling don't make sense in all situations. Especially if you are in a situation where the relationship between the negotiating opponents after the transaction is important. The best book for negotiation is "Bargaining for Advantage" http://bit.ly/HZwdW http://bit.ly/HZwdW. "Getting to Yes" is also great: http://bit.ly/oHSCL http://bit.ly/oHSCL. Avoid any negotiation book with "Power" in the title. =)

chops 18y ago
Regarding negotiation, low-balling and high-balling don't make sense in all situations. Especially if you are in a situation where the relationship between the negotiating opponents after the transaction is important. I agree that there are circumstances where high/lowballing isn't appropriate: You don't go to a long-time customer and start negotiating for 10x the cost for the same service. But in the case of a new contract, that highballing will set the course for the following deals. You get more at the start, and the following deals will all follow a similar price-point. Furthermore, by demanding high at the beginning, and then coming down, the person with whom you're negotiating will feel as though he/she "won" the negotiation, due to the huge concessions you made "He was asking a million dollars for a plan and we got him for $250k." My point is you can highball and still have a solid post-negotiation business relationship. I will definitely be checking out your book recommendations though.
sachinag 18y ago
You know, this is fascinating. I don't have a trouble closing - I have trouble cold calling and prospecting. In a negotiation, all you have to do is figure out the cost savings/additional revenue for your customer and find the highest acceptable price that's NPV positive for them. That's why healthcare sales people have all these fancy ROI models (built by third parties, wink wink) that they truck into sales meetings. It's much easier mechanically and emotionally to deal with a negotiation; it's much harder to randomly call people and be cursed at/hung up on.
daniel-cussen 18y ago
People punish others when asked for too much. After all, asking too much is the etymology of arrogance.

Brushfire 18y ago

This is good advice if you never have to deal with the person again. In other words, this is the advice used by used car sales people, etc. In normal business negotiations this is very bad advice. Using tactics that ask for ridiculous concessions paints you as either stupid or manipulative. This type of attitude will get you classified as an asshole, and customers/vendors wont ever want to deal with you again. Negotiating a single deal with outrageous outcomes is not as important (for most businesses) as negotiating 200 deals successfully with the same customer.