Negotiation: The Element of Time in Decisions

04/03/2023by dang tin0

The Element of Time in Decisions

TIME AND TIMING are key factors in effective negotiating. Very often, you can get an excellent deal in a negotiation if you plan the timing carefully in advance.

The Secret Is Out

For example, when purchasing a new car, there is a strategy you can use. Salespeople and sales managers have quotas to fulfill each month. If you visit a dealership in the first three weeks of a month, they are not yet under any pressure to fulfill their quota. Because of this, they will ask for the highest possible prices and will be the least flexible in negotiating.

The best time to buy a car is in the last two or three days of the month. You can go to the dealership earlier to test-drive and select the car that you want to purchase. But wait until the last two or three days of the month to begin negotiating the final price, terms, and conditions. You will always get a better deal, and sometimes a vastly better deal.

Some years ago I was giving a sales seminar to more than 1,000 people. I mentioned this factor of timing with regard to buying a car as a casual comment to the people in the audience who might be thinking of buying a car in the future. To my amazement, there turned out to be almost 100 car salesmen from different companies spread throughout the audience. They were furious at my “revelation.” When the seminar was over, they chased me down the street shouting and swearing at me for having given away one of the best kept secrets in automobile sales.

Beware a Sense of Urgency

Perhaps the most important factor in timing has to do with a sense of urgency. The more urgently you want to purchase something, the less bargaining power you have. Good salespeople and negotiators use every device to create a sense of urgency to weaken their customers’ ability to negotiate effectively on their behalf.
“If we cannot come to an agreement today,” the salesperson says, “the entire price changes tomorrow morning.” Or, “We have a special on this particular item, but it ends today at five o’clock. After that, it goes back to full price.”
To counter this technique, when someone says that you must make a decision immediately or you will lose special terms or conditions, you reply by saying: “If I have to make a decision immediately, the answer is no. But if I have an opportunity to consider your offer carefully, the answer may be different.”

Earlier in American history, fire departments were privately owned and staffed by local shopkeepers. When a person’s home was on fire, the homeowner would send someone to the fire department to request a fire truck as soon as possible. When the fire truck arrived at the burning home, the owner of the fire truck would then negotiate with the homeowner the charging price to put out the fire. As you can imagine, the homeowner was not in a position to bargain very well on his own behalf. It was because of this imbalance that all fire departments eventually became city owned and managed.

Don’t Rush into a Decision

Another manipulative technique is “rushing.” It occurs when the other party tries to rush you or hurry you into making a decision before you have a chance to give it much thought. Whenever someone tries to rush you into a decision, you can counter by saying, “I need more time to think about this decision. I will let you know at a later date.”
Excellent negotiators, in fact, use time to delay. Delay is the cruelest form of denial. The more you delay a negotiation or a resolution for a person who wants to come to some kind of conclusion, the greater strength you have.
Delay in reaching an agreement is a powerful technique that you can use to protect yourself. Put off serious decisions for at least twenty-four hours to allow for reflection and further consideration. The more you delay the making of a decision in a negotiation, the better your ability to make a better decision. The final deal that you get will improve as well.

Set and Avoid Deadlines

Another helpful device with regard to time and timing is deadlines. Wherever possible, give the other party a set deadline for decision making. Tell the other party that if you do not have a decision by a specific time or date, all bets are off. The price, terms, and conditions will change. You will sell the product or service to someone else.
Herb Cohen, a master negotiator and teacher of negotiating, tells a story about a valuable lesson he learned early in his career as an executive.

He was sent to Japan to negotiate a large manufacturing contract. This potential business arrangement was important to his company and to himself as a young executive.
When he arrived in Japan, his hosts picked him up in a limousine, drove him to his hotel, and told him that they would take care of everything during his visit as their honored guest. They asked him for his plane tickets so that they would know when he was departing and they could arrange for travel back to the airport. As a result, they knew that he had six days in Japan before he had to leave and return to the United States.

For the first five days, they lavishly wined and dined him. They took him to the plant and toured him around. But they never discussed business. Because of their courtesy, he attempted to be as polite as possible in return. But they didn’t get down to serious negotiating until the final day. They were still negotiating the final details in the car on the way to the airport. He accepted a far worse deal than he ever would have gotten if he had realized that they were using time against him.

The 20/80 Rule in Negotiating

In negotiation and in timing, the 80/20 rule applies in a special sense. This rule says that the last 20 percent of any negotiation will deal with 80 percent of the important issues and the value of the entire transaction. The first 80 percent of a negotiation will only deal with 20 percent of the issues to be decided.
You must accept that the first 80 percent of the discussion will revolve around unimportant issues. It is only near the end of the negotiation, when time is running out, that you will get down to, discuss, and finally agree upon the most important issues under consideration.

What I have learned is that you must be patient during the first part of the negotiation. There is no point in trying to rush. If you have two hours to discuss a transaction, the most important points will be decided in the last thirty minutes. Be patient.

Leave a Reply

Your email address will not be published. Required fields are marked *