The What-If Tactic

by Graham Denton

Potential buyers negotiate by using tactics, and tactics should not be confused with etched-in-stone conditions. That's the basic lesson of Gary Karrass's interesting book Negotiate to Close, based on the sales negotiating courses of his company Karrass Seminars. For example, consider a tactic that Karrass admits "can drive a sales person crazy," unless you're prepared to deal with it carefully and patiently. He calls it the "what if" tactic, and it goes like this:

A buyer needs a certain number of units of your product, say 1000. But he doesn't let you in on that crucial piece of information. Instead, he asks for multiple bids on different sized orders: How much per unit will it be for 1000 units? 100 units? How about 10,000 units? Then, having received this information, he crunches numbers to arrive at an informed guess about your company's production costs, pricing, and even margins of profit. This puts him in a position to begin the negotiations at the lowest unit-cost he knows you can tolerate-however large or small his intended order.

Karrass gives the example of a tailor friend who, in buying material, uses the what-if tactic to find the lowest price at which a fabric maker can afford to sell. Say the supplier is willing to sell 1000 yards of fabric at twelve dollars a yard but will lower the price to only eight dollars a yard if he can find someone to take his entire stock off his hands. Once he discovers this, Karrass's friend begins negotiating at eight dollars a yard, and he usually gets his 1000 yards at closer to that discounted rate than to the twelve-dollars a yard he was originally quoted.

The hint of a higher bulk purchase is only one of many what-if bargaining points. Others might include interest in a long-term contract, an offer to buy more than one product, a query about advance payment or expedited installment payments, or the offer to "simply" the arrangement by providing technical help. Notice that none of these buyers' queries need be legitimate bargaining points; that is, they're not necessarily going to be what the buyer is truly interested in. They're a way of getting the seller to reveal information that the buyer is then able to use in jacking down the price.

In dealing with the what-if tactic, Karrass advises, the most valuable rule of thumb is to take your time. You're under no obligation to reveal, even by implication, the way your company arrives at its pricing schedules. And it's perfectly legitimate, when you're faced with a what-if question, to tell the prospect that you'll have to consult with your organization before you can get her the information she requires.

That may or may not work to your mutual advantage. But it's better to be certain, before you commit to a discount that's based on conditions, that your company will consider supporting it even without the conditions. That's playing the what-if game with both your eyes open.