What the heck is a Krunch? In a nutshell, it’s a negotiating technique that a buyer can use to squeeze a lower price / better terms out of someone who wants to sell them something. I’ve seen this technique used most often when I’ve been buying a house – it’s a classic. I guess that I should confess that I’ve also used it when I’ve been selling a house…
How Does It Work?
Here’s how the Krunch technique works. The buyer has to have more than one person who wants to sell to them. When the buyer has collected prices from each of the sellers, then the buyer can go back to every one of them and tell them “Your price is to high, you can do better.” Generally speaking, each of the sellers ends up lowering their price.
Why Does It Work?
To understand why the simple Krunch technique works so well, you’ve got to look into the mind of the seller and see what goes on when the buyer tells them that their price is too high:
- Yeah, I built some give into my pricing just in case this happened.
- I knew that what I was selling was too expensive.
- The buyer must have a lower price.
- Hey! The buyer is talking with me so they must like me.
- Oh, oh – does the buyer know something that I don’t?
What Are The Drawbacks To Using It?
It doen’t take a rocket scientist to realize that sellers who keep getting Krunch’ed will eventually start to build up defenses to it. Specifically, what you can expect them to do is:
- Boost their prices because they know that they’ll be asked to lower them.
- Reduce the quality of the product being offered because they know the price will be lower.
- Drop some services that used to be given.
What Countermeasures Can You Use?
What good is knowing about a negotiating tactic if you don’t know how to defend yourself against it? Here are three things that you can do when someone tries the Krunch on you:
- Defend or describe your value. It’s not all about price so take some time to tell the buyer about why your offer is better than anyone elses.
- Ask them how much better you have to do. There’s no need to lower your price more than they are expecting you to.
- Buy yourself some time by starting to respond by saying “Hmm…” This will buy you time and will make the buyer feel obligated to fill the blank space with an explanation as to why they want you to lower your price.
Hopefully you’ve learned to set your negotiating goals high enough so that you will achieve more than you ever dreamed possible. Now that you know how to deal with the Kurnch tactic, next time we’ll have to talk about the “nibble”…
When was the last time that someone tried the Krunch on you? Have you built up defenses against it? Have you ever used the Krunch on someone? How did things turn out? Leave a comment and let me know what you think.