Concession Areas

by Graham Denton

There are numerous areas in a selling negotiation where the customer will be inclined to ask. In his entertaining and useful Complete Idiot's Guide to Dynamic Selling, sales trainer Tony Parinello singles out these:

• Price. No surprise here. Don't expect to enter any negotiation without this variable, at some point, being put on the table. On the other hand, don't overestimate its leverage. Parinello goes so far as to say that price is "rarely" the reason that a prospect decides not to buy.
• Availability. This includes delivery schedules. They can usually be adjusted, but be careful. Check with production and delivery people before you commit: "Don't promise what you can't deliver."
• Payment terms. Financing is the bailiwick of your financial experts. When your customer mentions down payments, installments, or interest rates, Parinello advises that you defer to them.
• Performance specs. Here he advises that you stick with what you can back up now. Don't "speculate about what future releases or programs will be able to do." The reason is logical. If you agree to provide the customer with a freebie upgrade, she may simply postpone the sale until the upgrade is available.
• Service. Customers are always asking "What if something goes wrong?" It's a reasonable question. The answer ought to be on your contract or service agreement. If it's not, get clarification from the home office. Don't make any unilateral, unauthorized concessions when it comes to return, repair, replacement, or warranty conditions.
• Penalties. This means "consequences for late or poor performance on your organization's part." Being willing to make concessions in this area-assuming your service people will approve them-is a sign of your company's commitment to the customer's success.

On the first of these concession areas, price, Parinello offers some succinct advice: "Don't cave in too early." In agreement with this caveat is Gary Karrass. In fact, in his book Negotiating to Close, the head of Karrass Seminars advises that you should "give in slowly" whatever the particular area under negotiation.

To illustrate, he describes his meeting with the manager of a Los Angeles office building where he wanted to rent space. Bringing with him a list of ten "must do" concessions, he asked first to have the outer offices painted. Instead of saying "Fine," the manager went through a fifteen-minute ritual of writing on her pad, punching a calculator, and leafing through files. Then she said "Fine," and they moved on to Karrass's next item, janitorial service.

Same deliberate response, same delay. The manager excused herself to speak to maintenance, and came back with the answer that Karrass wanted. But it was another twenty minutes into the meeting, and after a string of these delays, it was Karrass who "caved in." "She had made me work so hard and wait so long for each little concession, she wore me down." The manager, by giving in slowly, had improved her position. She had learned the open secret that time is money, and she had become a formidable expert at the considered response.