Saturday, August 7, 2010

The Negotiation Nibble

A year and a half ago I purchased a new stove for our kitchen from Best Buy. I'd seen the one I wanted on sale, so I went back with a friend and his truck to make the purchase. The stove I wanted was no longer on sale. "No problem," I thought.

One of the rules of negotiation is to ask for what you want. I asked the salesperson if he would sell me the stove for the price it had been on sale for the week earlier. He told me he'd have to call his supervisor, which he did.

When the supervisor came out, I asked him if I could have the stove for the earlier sale price. He went in the back and came back with the older sale prices and agreed to sell it to me for that lower amount. Not bad, but I didn't stop there. I'd achieved what I wanted, but I also wanted to try a "nibble."

Now, before I go on, I realize that many people in America frown on nibbling. Some think it is cheap or demeaning. However, it's an accepted business practice in many cultures. It is a negotiation tactic, and one that has been around for a long time.

The answer to the question of whether you should nibble or not, will depend on your specific situation and your business judgment. At Best Buy, I wanted to try the tactic out. It just happened that at the time I was buying the stove, a CD I was interested had just come out.

So after the supervisor reduced the price to that of the earlier sale, I asked him if he would throw in the CD for free, since I was buying such a big item. He agreed, and I got a CD with my nibble technique. (I also got a story that I knew I'd use in my trainings and writings).

Asking a tailor which tie he is going to throw in with your suit purchase is another example of nibbling. Another example might be asking for an accessory when purchasing a new car. Nibbling works because you are so close to a deal, and the other party usually just wants to close.

By giving a bit more, there is a better chance of establishing a long-term relationship and referrals. And come on, how much does the CD cost Best Buy? Easy way to make a customer feel good and come back again.

So what? A ten-dollar CD is no big deal. Right? What about nibbles that are worth thousands? What if you are purchasing something for $100,000 and you ask for a 2% discount for cash? That little nibble puts $2,000 in your pocket. Nibbles can be small, but they can also be very large. I read about a $50,000 nibble on a twenty million dollar deal one time.

Many people don't like to negotiate, and they especially don't like to practice techniques like nibbling. I do, because it is practice for my teaching and writing. But we all should recognize that it is a negotiation technique, and an effective one. Even if you never use it, knowledge of it can help you stop others from nibbling on you.

But I also think it is good practice to try negotiation strategies and tactics now and then when they don't matter that much, so you will be a better negotiator when it really counts. Plus, what's wrong with getting a free CD now and then?

By : Alain_Burrese

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