Sep 16

Effective negotiating strategies: using deal fatigue against you

Ever shop for a car and the salesperson puts you in some tiny office with uncomfortable chairs and then asks you to wait while they take the deal to the manager and you wait and wait and wait? It is not that salesperson moves slow or the sales manager can’t make a decision or time moves slower in an auto dealership. It is more likely that they are using deal fatigue against you.

Deal fatigue is a term often used to describe negotiations which tend to drag on and, having lost all patience, one side or the other gives in. Deal fatigue is often a good opportunity for that most despised negotiation tactic- trying to renegotiate or slip in new terms at the last minute (as Squawkfox found out when buying a used car).

A good salesperson aims modest but knows, having spent hours negotiating, you may be more susceptible to agree to something, anything, to get the negotiations over. This is why extended warranties are always sold last- the salesperson knows that few people walk away from a deal over an extended warranty and commissions on extended warranties are higher than the good or service being sold. What good salespeople are really doing is exploiting our innate need in the internet age to seek an expedient rather than a correct solution.

This is why so many labor negotiations are finalized in the wee hours. Both sides are literally tired of one another and, suddenly, those entrenched positions are no longer so entrenched (and in public-sector negotiations, it is not their money anyways so you might as well give away someone else’ farm- see David Miller, exhibit A).

But, let’s turn this around on its head. Remember that deal fatigue is a double-edged sword. Most salespeople work on commissions and the longer you negotiate and may not close the larger the opportunity cost of lost commissions. The absolute worst thing for a salesperson is for hours of negotiations to occur and for you to simply walk away. Thus, the other side may simply cave as well sensing lost commission.

There are a few practical things you can do to avoid having deal fatigue work against you.

  1. Never negotiate hungry. Big ticket item negotiations, for cars and houses, can literally take hours. Let your head do the thinking not your stomach.
  2. Create an artificial deadline. Indicate that you have an appointment to keep at the beginning of a negotiation and, if you can’t close the deal before the appointment, you will have to leave. Remember good salespeople want two answers: “yes” or “no.” The two worst answers are “maybe” or “let’s talk tomorrow.” The key to this one is to stick to the deadline AND walk away or they know you are bluffing.
  3. Tag team the salesperson. Bring someone else along and take turns on issues. You tend to keep fresh and you have a perfect good cop, bad cop set-up.
  4. Ask for a life-line. Like the show “Who wants to be a millionaire?” have someone who you can call to give you objective advice in the heat of negotiations (it is also a covenient way to take a break).
  5. Simply walk away. It is not a perfect home or the perfect car or the perfect gadget until it is yours. The worst thing in the world is actually not getting what you want but getting what you want- and paying too much for it.

One Response to “Effective negotiating strategies: using deal fatigue against you”

  1. Riscario Insider Says:

    Thanks for reminding us that the other party wants a deal too — especially as they invest more time in the negotiations. We’re generally in the position of strength as the buyer but we forget.

    Being willing to walk away is key. Once-in-a-lifetime deals are rare. Other opportunities and better opportunities arise.

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