The Walk-Away Method
THIS IS ONE of the most powerful tools in negotiation. In fact, you should never enter into a serious negotiation unless you are prepared to walk away if you do not achieve your most important goals in a transaction.
Previously, we talked about the importance of developing options (Chapter Twelve) and finding out what else is available. It is important to do research on your negotiating partners to find out what their real wants, needs, and problems are. When you go into a negotiation, you should have all the information you need so that you can walk away if you are not satisfied with the price or terms.
The reverse of developing options is to go into a negotiation with no choice but to find some way to agree with the other person. When you have no options, you have no choices. When you have no choices, you have no freedom. And the more freedom you have in a negotiation, the better deal you are going to get for yourself.
Be Prepared to Walk Away from Every Negotiation
In negotiating, I do everything possible to be in a position where I can walk away at any time. It gives me tremendous bargaining strength. It almost always ensures that I get a better deal than I would have received if I had not developed my options and was not willing to “pull the trigger.”
Use the walk-away method when you wish to get the lowest price possible when you are buying, and the highest price possible when you are selling. In a negotiation, I will often say, “Just tell me your very best price, one time, and I will tell you yes or no, whether I will buy it or not.”
Take the Advantage
This type of statement often unnerves other people. They were expecting to start with a much different price. Now they are faced with my walking away at the very beginning if their price is unreasonable.
Or, if I’m the buyer, I will say to the seller, “You tell me what your walk- away price is.” In other words, you tell me the price below which you will not sell. You tell me your final price, and if I can meet it, then we can discuss it. But if I can’t, then I’ll walk away and we’ll forget it. Very often, this approach gets you immediately to a price that is far below the price the other party was going to start with.
Refuse to Quibble
Especially when I’m in a hurry, I prefer not to quibble. I prefer the walk-away price. I have bought houses, cars, appliances, and many other things using the walk-away close. When I am selling something, I begin almost every conversation by saying, “This is the least amount that I will accept. If this amount is not acceptable, I understand.”
Sometimes, people will ask, “What if you really want to buy the product or service, and now you have boxed yourself in by saying that you will walk away?”
Simple. Remember that walking away is merely another way of negotiating. You can get up and walk out of the room or out of the store, and then turn around and come back. But the rule is this: You never know the best price until you get up and threaten to walk away.
Lessons from Buying a Car
When I wanted to buy my wife a new car, we went to the dealership selling the kind of car she wanted. My wife and I were accompanied by two friends who are quite knowledgeable about buying and selling cars.
After viewing and trying out the car that was exactly right for my wife, we sat down for the negotiation. But first, I said, “I have worked in the car business for many years. I know exactly how much these cars are marked up, and how much profit you need to make per car to stay in business. Please tell me your very best price for this car, and I will tell you whether or not it is acceptable. Is that okay?”
The saleswoman beamed and said that would be perfectly acceptable. She then gave a price of $30,000 for a car that I knew the dealer could sell for $25,000 and still make a profit.
I looked at the number and said, “Thank you. Here is what I will do: I will pay you $25,000 in cash for this car, right now, all in, including taxes and preparation.”
When she insisted that $30,000 was the best price she could offer, my wife, our two friends, and I got up and headed for the parking lot. The saleswoman ran after us and said she needed to talk to her manager. After some discussion between the two of them, the saleswoman returned with an “absolutely best” price of $28,995. Once again, we walked out. We went back and forth like this three or four times. The saleswoman would come in, insist that she had the lowest possible price that she could give, and we would walk out. Finally, with her sales manager and other people all involved, she offered to sell the car to me for $25,000.
Remember, you never know what the best price is until you get up and walk away. You simply must develop the courage to do it, over and over, until it becomes a normal and natural part of your negotiating skills.
