Never spilt the difference

 

“Never Split the Difference!

This is perhaps one of the most important techniques to learn in the art of negotiation! Many of us do not think we need to spend any time learning and understanding sales techniques, but taking the time to learn to ‘never spilt the difference’ may be one of the most important things you ever do. Why?

TeamAt some point in time you will be in a buy-sell situation, either in your personal life or in business. At some point in the negotiation, it will be time to close the deal. As you and the other party negotiate back and forth on price, you “will establish a high and a low.

Once this is established there will come a moment when you may be tempted to split the difference, often to make it easier to move the transaction process to a close. But when you split the difference you inevitably lose because you have potentially given up far more then you needed to.

It is at this moment you need to remember and use “Never Split the Difference!”

For Example:

Bob has put his car up for sale and he is asking $ 20,000.00 for it.

Mark comes along and likes the car. He’d like to make an offer to get things started so he offers to buy Bob’s car for $10,000.00.

Bob quickly counters with an offer to sell at $15,000.00.

Mark pauses for a moment and thinks about his counter offer. He likes Bob’s willingness to negotiate down so far, and he really thinks he can get the car for a great price. He responds with $11,500.00.

Bob does not want to lose Mark, and he’s interested in closing the transaction so he splits the difference once again in an effort to show compromise and a willingness to negotiate. He offers $ 13,250.00.

Mark is pretty pleased with that offer, and counters  “again with $12,250.00, at which point Bob accepts and closes on $12,250.00.

Who gained the most in the transaction? Both Bob and Mark are happy the transaction closed. Bob sold the car and while he did not get his ideal price of $15,000.00 he feels he was close enough with the $12,250.00.

Spy ImposterMark on the other hand is also pleased. He didn’t want to spend more than $15,000.00 but really wanted the car, so it seems that everyone wins.

But in truth Bob gave up more than he perhaps needed to by splitting the difference. He lost so much ground with his first counter offer of $15,000.00, coming down a full $5,000.00 dollars in an effort to show a willingness to work with Mark, after which he then split the difference again.

In the end Bob moved a full $ 7,750.00 while Mark only moved $ 2,250.00.

The danger with splitting the difference is that often the movements are significant chunks and completely unnecessary.

What might the outcome have been if Bob had initially countered with $ 18,500.00 instead of his $15,000.00?”

Resource – “SECRETS OF POWER NEGOTIATING FOR SALESPEOPLE”

by Roger Dawson

 

 

 

 

 

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