Why Providing A “Best And Final Offer” Is Never A Good Idea

by drjim on October 15, 2010

Sometimes the other side of the table can make scary demands of you

Sometimes the other side of the table can make scary demands of you

Every sales negotiation starts out in a particular way. Sometimes it’s good like when the other side lays out the issues and makes a concession to you right off the bat.Other times it’s bad. You know it’s going to be bad when the first words out of the other side’s mouth are “Give me your best and final offer”. What’s a sales negotiator to do now?

Demand And Offer Tactics

In the world of sales negotiations there is a group of set tactics that have been used since the start of time. Starting a negotiation by stating that you want the other side’s best offer is one of these ancient tactics.

Often times when the other side makes this bold statement, they’ll follow it up with an explanation. This explanation often goes something along the lines of”I don’t like to negotiate”. Great statement, but it’s pretty much untrue – this is simply the way that they like to start their negotiations.

Why Providing A Best And Final Offer Is Never A Good Idea

What the other side is trying to do is to get you to start the negotiations at a lower price point than you normally would. This is a fantastic advantage for them – they will have made a great deal of negotiating progress with very little effort on their part.

All too often, when a negotiator is presented with this kind of statement,they’ll panic. The last thing that they want to do is to anger or upset the other side of the table and so they’ll react in a way that they think will diffuse the situation. Generally this means that they’ll go ahead and lower their price.

The problem with this is that despite what the other side said, the offering of this lower price does not result in a deal. Rather it just provides a point for the negotiations to start at. Once the other side sees how much you were quickly willing to come down in price, they’ll know that there is more lowering that you can be made to do.

How To Counter This Negotiating Tactic

As a sales negotiator you need to be on the lookout for the use of this tactic. When the other side starts to use it on you, clearly what you don’t want to do is to follow along and provide them with a low-ball offer.

Instead, what you are going to want to do is to change the discussion. Without rejecting outright what they are asking for, you’re not going to want to give it to them.

What you are going to want to do is to take the time to explain why your position is so unique that it’s worth the initial value that you’ve placed on it. Make sure that you point out things that the other side of the table can’t get anywhere else.

After all of this is said and done, you may still find yourself in a position where some lowering of your price is going to be necessary. That’s ok. Just make sure that you only lower it a small amount. Once again, this isn’t going to allow you to reach a deal, rather it’s the start of the negotiating process.

What All Of This Means For You

Every sales negotiation involves the use of tactics by both sides in order to get what they want. You will often encounter situations where the other side tells you to provide them with a best and final offer. Don’t do it!

Instead, use this as an opportunity to revisit why your offering is more valuable than other offerings that may be available at a lower price. Yes, the other side will push back on this, but you will have changed the discussion from a pricing discussion to a discussion about the value of your offering. This is much safer ground.

In the end,every sales negotiation comes down to price. Being aware of the other side’s tactics and making sure that you are ready to deal with them is what will make you a great sales negotiator.

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™

Question For You: How do you deal with the other side when they become visibly angry with your negotiating position?

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What We’ll Be Talking About Next Time

In order to make your next sales negotiation a success, you are going to end up having to make some concessions. Knowing that you’re going to end up having to do this means that you’re going to need to have some strategies up you sleeve relating to how you want to manage your concessions. One time-honored way to make the whole concession thing work out for you is to use “straw issues”. Let me explain myself…

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