One of the most frustrating situations you can run into is trying to negotiate with the person who claims that he or she doesn't have the authority to make a final decision. Unless you realize that this is simply a negotiating tactic that's being used on you, you have the feeling that you'll never get to talk to the real decision-maker.
When I was president of the real estate company in California, I used to have salespeople coming in to sell me things all the time: advertising, photocopy machines, computer equipment, and so on. I would always negotiate the very lowest price that I could, and then I would say to them, “This looks fine. I do just have to run it by my board of directors, but I'll get back to you tomorrow with the final okay.”
The next day I could get back to them and say, “Boy, are they tough to deal with right now. I felt sure I could sell it to them, but they just won't go along with it unless you can shave another couple of hundred dollars off the price.” And I would get it. There was no approval needed by the board of directors, and it never occurred to me that this deception was underhanded. I and the people with whom you deal see it as well within the rules by which one plays the game of negotiating. So when the other person says to you that they have to take it to the committee, or the legal department, it's probably not true, but it is a very effective negotiating tactic that they're using on you. Fortunately, Power Negotiators know how to handle this challenge smoothly and effectively.
Your first approach should be trying to remove the other person's resort to higher authority before the negotiations even start, by getting him to admit that he could make a decision if the proposal was irresistible. This is exactly the same thing that I taught my real estate agents to say to the buyers before putting them in the car, “Let me be sure I understand, if we find exactly the right property for you today, is there any reason why you wouldn't make a decision today?” It's exactly the same thing that the car dealer will do to you when, before he lets you take it for a test drive, he says, “Let me be sure I understand, if you like this car as much as I know you're going to like it, is there any reason why you wouldn't make a decision today?” Because they know that if they don't remove the resort to higher authority up front, then there's a danger that under the pressure of asking for a decision, the other person will invent a higher authority as a delaying tactic. Such as, “Look, I'd love to give you a decision today, but I can't because my father-in-law has to look at the property (or the car), or Uncle Joe is helping us with the down payment and we need to talk to him first.”
One of the most frustrating things that you encounter is taking your proposal to the other person and having her say to you, “Well, that's fine. Thanks for bringing me the proposal. I'll talk to our committee (or our attorney or the owners) about it and if it interests us we'll get back to you.” Where do you go from there? If you're smart enough to counter the Higher Authority Gambit before you start, you can remove yourself from that dangerous situation.
So before you present your proposal to the other person, before you even get it out of your briefcase, you should casually say, “Let me be sure I understand. If this proposal meets all of your needs (That's as broad as any statement can be, isn't it?), is there any reason why you wouldn't give me a decision today?”
It's a harmless thing for the other person to agree to because the other person is thinking, “If it meets all of my needs? No problem, there's loads of wriggle room there.” However, look at what you've accomplished if you can get them to respond with, “Well, sure if it meets all of my needs, I'll give you an okay right now.”
Look at what you've accomplished:
- You've eliminated their right to tell you that they want to want to think it over. If they say that, you say, “Well, let me go over it one more time. There must be something I didn't cover clearly enough because you did indicate to me earlier that you were willing to make a decision today.”
- You've eliminated their right to refer it to a higher authority. You've eliminated their right to say, “I want our legal department to see it, or the purchasing committee to take a look at it.”
What if you're not able to remove their resort to higher authority? I'm sure that many times you'll say, “If this proposal meets all of your needs is there any reason why you wouldn't give me a decision today?” and the other person will reply, “I'm sorry, but on a project of this size, everything has to get approved by the specifications committee. I'll have to refer it to them for a final decision.”
Here are the three steps that Power Negotiators take when they're not able to remove the other side's resort to higher authority:
Step number one – appeal to their ego. With a smile on your face you say, “But they always follow your recommendations, don't they?” With some personality styles that's enough of an appeal to his ego, that he'll say, “Well, I guess you're right. If I like it, then you can count on it.” But often they'll still say, “Yes, they usually follow my recommendations but I can't give you a decision until I've taken it to the committee.”
If you realize that you're dealing with egotistical people, try preempting their resort to higher authority early in your presentation, by saying, “Do you think that if you took this to your supervisor, she'd approve it?” Often an ego-driven person will make the mistake of proudly telling you that he doesn't have to get any body's approval.
The second step is to get their commitment that they'll take it to the committee with a positive recommendation. So you say, “But you will recommend it to them-won't you?” There are only two things that can happen at this point. Either she'll say, yes, she will recommend it to them, or she'll say, no she won't-because . . . Either way you've won. Hopefully, you'll get a response similar to, “Yes, it looks good to me, I'll go to bat for you with them.” But if that doesn't happen, and instead they tell you that they won't recommend it because, you're still ahead, because any time you can draw out an objection you should say, “Hallelujah” because objections are buying signals. For example, nobody will object to your price unless buying from you interests them. If buying from you doesn't interest them, they don't care how high you price your product or service.
For a while I dated a woman who was really into interior decorating. One day she excitedly dragged me down to the Orange County Design Center to show me a couch covered in kidskin. The leather was as soft and as supple as anything I'd ever felt. As I sat there, she said, “Isn't that a wonderful couch?”
I said, “No question about it, this is a wonderful couch.”
She said, “And it's only $12,000.”
I said, “Isn't that amazing? How can they do it for only $12,000?”
She said, “You don't have a problem with the price?”
“I don't have a problem with the price at all.”
Why didn't I have a problem with the price? Right. Because I had absolutely no intention of paying $12,000 for a couch, regardless of what they covered it with. Let me ask you this: If buying the couch interested me, would I have a problem with the price? Oh, you had better believe I'd have a problem with the price!
Objections are buying signals. We knew in real estate that if we were showing property, and the people were “Ooooing and aaahing” all over the place, if they loved everything about the property, they weren't going to buy. The serious buyers were the ones who were saying, “Well the kitchen's not as big as we like. Hate that wallpaper. We'd probably end up knocking out that wall.” Those were the ones who would buy.
If you're in sales, think about it. Have you ever in your life made a big sale where the person loved your price up front? Of course not. All serious buyers complain about the price.
Your biggest problem is not an objection, it's indifference. I would rather they said to you, “I wouldn't buy widgets from your company, if you were the last widget vendor in the world, because . . .” than have them say to you, “I've been using the same source on widgets for 10 years, and he does fine. I'm just not interested in taking the time to talk about making a change.” Indifference is your problem, not objections.
Let me prove this to you. Give me the opposite of the word love. If you said hate, think again. As long as they're throwing plates at you, you have something there you can work with. It's indifference that's the opposite of love. When they're saying to you, like Rhett Butler in Gone With the Wind, “Quite frankly, my dear, I don't give a damn.” – that's when you know the movie is about over. Indifference is your problem, not objections. Objections are buying signals.
So when you say to them, “You will recommend it to them, won't you?” they can either say, yes they will, or no they won't. Either way you've won. Then you can move to step three:
Step Three: The qualified “subject to” close. The “subject to” close is the same one that your life insurance agent uses on you when he or she says, “Quite frankly, I don't know if we can get this much insurance on someone your age. It would be “subject to” you passing the physical anyway, so why don't we just write up the paper work “subject to” you passing the physical?” The life insurance agent knows that if you can fog a mirror during that physical, he or she can get you that insurance. But it doesn't sound as though you're making as important a decision as you really are.
The qualified “subject to” close in this instance would be: “Let's just write up the paper work ‘subject to' the right of your specifications committee to reject the proposal within a 24-hour period for any specifications reason.” Or, “Let's just write up the paper work ‘subject to' the right of your legal department to reject the proposal within a 24-hour period for any legal reason.”
Notice that you're not saying subject to their acceptance. You're saying subject to their right to decline it for a specific reason. If they were going to refer it to an attorney, it would be a legal reason. If they were going to refer it to their CPA, it would be a tax reason and so on. But try to get it nailed down to a specific reason.
So the three steps to take if you're not able to get the other person to waive his or her resort to higher authority are:
- Appeal to the other person's ego.
- Get the other person's commitment that he'll recommend it to the higher authority.
- Use the qualified subject-to close.
Being able to use and handle the resort to higher authority is critical to you when you're Power Negotiating. Always maintain your own resort to higher authority. Always try to remove the other person's resort to a higher authority.
Key points to remember:
- Attempt to get the other person to admit that he could approve your proposal if it meets all of his needs. If that fails, go through the three counter gambits:
- Appeal to his ego.
- Get his commitment that he'll recommend to his higher authority.
- Go to a qualified subject-to close.
- If they are forcing you to make a decision before you're ready to do so, offer to decide but let them know that the answer will be no, unless they give you time to check with your people.
- If they're using escalating authority on you, revert to your opening position at each level and introduce your own levels of escalating authority.