Negotiation often involves an element of strategic gamesmanship, a concept eloquently explored by Eric Byrne in his book “Games People Play: The Psychology of Human Relationships.” Byrne posits that human interactions, including negotiations, are akin to game playing where individuals assume specific roles. These roles become especially pronounced when conflicting interests are at play. Understanding these games can significantly enhance your negotiation skills.
In this series of articles, we will break down and expand on the common games people play during negotiations, starting with the “Take it or Leave it” tactic. Our goal is to arm you with tools to ensure you don’t end up in a losing position.
How to Handle "Take it or Leave it"
1. Empathize and Deflect
Show understanding for the other party’s position while firmly asserting your own limitations. By acknowledging their request but explaining your inability to accommodate it, you maintain a respectful tone while standing your ground.
Scenario: An entrepreneur has developed an innovative tech startup and is seeking funding from an investor to scale their business. During the negotiation process, the investor presents a “Take It or Leave It” ultimatum regarding the equity stake they expect in return for their investment.
Example:
- Entrepreneur: “I appreciate your offer, but the equity stake is too high for me. Can we discuss other terms?”. Is there any flexibility to revisit the equity allocation and find a solution that aligns with both our interests?”
This approach conveys a willingness to work towards a mutually beneficial solution while also asserting the entrepreneur’s own limitations.
2. Appeal to Limits
If the request is beyond your budget or resources, clearly communicate your constraints. This approach highlights that you are not simply unwilling but rather unable to meet their demands.
Scenario: An entrepreneur runs a small catering business and is negotiating with a potential client for an upcoming event. The client presents a “Take It or Leave It” ultimatum regarding the price for the catering services.
Example:
- Customer: “I’m interested in your catering services, but I’ve received a lower quote from another provider. If you can match their price, I’ll hire you. Otherwise, I’ll have to go with the other option.”
- Entrepreneur: “Thank you for considering my catering services for your event. I take pride in delivering high-quality food and service that meets the specific needs of my clients. It is not possible to match the price to the current menu you are looking at. However, we can adjust the menu to fit your budget”
This response emphasizes the factors that contribute to their pricing, establishing the limitations they face in matching a lower quote and providing a way forward.
3. Seek Compromise
Propose a middle ground or alternative solution that can benefit both parties. By suggesting a compromise, you demonstrate a willingness to find common ground and foster a cooperative atmosphere.
Scenario: An entrepreneur is in negotiations with a supplier to secure favorable pricing and terms for the procurement of raw materials for their manufacturing business.
Example:
- Supplier: “Our pricing is non-negotiable. Take it or leave it.”
- Entrepreneur: “I understand that your pricing is currently non-negotiable. However, it is by special request of my board that you atleast consider increasing the credit period to 180 days. (Here you are seeking compromise and borrowing power from a higher authority (Read More Here)
By suggesting alternative terms that may be more flexible and beneficial, the entrepreneur demonstrates a willingness to find a solution that meets their cost targets while maintaining a productive and cooperative relationship.
Conclusion
The “Take it or Leave it” tactic is a common game in negotiations. By employing strategies like empathizing and deflecting, appealing to limits, and seeking compromise, you can navigate these situations effectively. Remember, the key is to maintain respect, assert your limitations, and always seek a mutually beneficial outcome. Stay tuned for the next part of this series where we will explore more negotiation games and how to handle them.
