After tough negotiations with a new customer, you’ve finally agreed on a fair price. You’ve mentally started to calculate your commission.
Then the customer gently clears his throat and says:
“Of course, my boss still has to okay this….”
Next day, you get the call:
“Look, if it were up to me we’d have a deal. But my boss just won’t go along at this price. He wants you to come down 15%.”
Hey, Where’d the deal go?
So what went wrong? Did you fail to properly qualify the customer?
Of course, there is a possibility that you ended up dealing with someone with no actual purchasing authority. But assuming you asked the right qualifying questions up front, that’s probably not the case. Few buyers will take the time and trouble to engage in negotiations unless they really do have the power to say yes.
The boss excuse might be an attempt to get you to commit to a position while leaving the other side free to squeeze more concessions from you. It puts you in a tough spot, because you’re negotiating with a phantom. “Hey, I totally understand your position,” the negotiator says. “But my boss…”
The higher up the food chain you go, the more likely you’ll encounter this negotiating tactic. Even the CEO or owner will suddenly have to talk to the board or purchasing committee. Or run the terms by the lawyers, accountants or investors.
Here are ways to counter the ploy:
1. Head it off
Try to establish the customer’s ability to say yes at the outset and confirm it repeatedly during the negotiations. That makes it harder for them to “invent” a higher authority at the last minute.
For example, before you begin your presentation you might ask: “If this proposal meets all your needs, is there any reason you couldn’t say yes today?” Or early in your presentation you can ask; “Do you think if you took this to your supervisor, she’d approve it?” Ego-driven customers may proudly inform you they don’t need anyone’s approval. Remind them later.
Or just come right out and ask: “Are you going to need your boss to sign off on this? If so, he or she should be part of this conversation.”
Assurances notwithstanding, the buyer can still play the boss card at the end, of course. But psychologically it’s going to be harder to do if they’ve already told you that they have the authority to say yes on their own.
2. Ask for a recommendation
If the buyer says, “I have to take it to the committee,” respond with: “But you will recommend it to them, won’t you?” When buyers agree to go to bat for you, they put their prestige on the line and they’ll be more likely to come back with a yes. If they say they won’t recommend you, ask why to get at their real objections.
3. Start again from zero
Don’t make your best offer the starting point for a new round of negotiations. If you thought you had a deal and the customer comes back with the boss excuse, you don’t have to stick with the terms you just negotiated. Go back to your original negotiating position and start over. Or explain that your boss wants concessions, too.
4. Stick to your guns
Remember, you always have the option to say no. When the buyer says the boss wants a concession, you can stand your ground. Often, the negotiator is simply testing you, and will back down right away.
5. Don’t take it personally
You may consider the boss ploy unfair or unethical. But don’t let hard feelings get in the way of a good deal. In the end, the important thing is whether the deal is profitable to all concerned.
Source: Roger Dawson, author of “Secrets of Power Negotiating,” was president of one of California’s largest real estate companies and has trained thousands of managers and salespeople on negotiating skills. Info: www.rdawson.com
Subscribe to the Sales Blog
Get the latest research on workplace learning with weekly posts delivered to your inbox