Why should you avoid the words “final offer"? In this video, learn exactly why, and find out how to keep yourself open to more negotiation until the very end.
- So we've been doing lots of trading, ideally in the format, if you then I, and we're so nearly there, we've almost got a deal. And just a couple of points really to look out for at the end here. Firstly, don't ask if it's their final offer. 'Cause if you say to somebody, "So is that your final offer?" What are they going to say? And they have to say, "Well, yes," 'cause they're not going to go, "Well, no, I'm going to come down more." So they have to say, "Well, yes." And what you've done then is you've dug them into a hole they can't move. So never say to somebody, "Is that your final offer?" Also never say, "And that's my final offer." 'Cause if you say that to them, then you are also now unable to move. And of course, if you do say, and that's my final offer and then you go beyond it and you pay a bit more, what you're saying to them is, next time we negotiate, if I say it's my final offer, you can ignore it. Now, what about if it really is your final offer? Is it okay to say it then? And the answer is no, it's still not okay to say it. Because if you say and that's my final offer and they discover that it really is, what you've told them now is that when you next negotiate, they've just got to push you and push you and push you until eventually you say and that's my final offer, and then they know it is. But until you say it, they know that it isn't. So the rule is never say, and that's my final offer or is that your final offer? Just don't use the words final offer. It will always lead to bad consequences in future negotiations. Now, what should you say if somebody says to you, "Is that your final offer?" It's a bad question to ask 'cause they're forcing you to dig yourself in and you don't want to dig yourself in. So the answer is to say, "Well, it depends on the deal." Just use it depends as a way to get out of the hole. Because if you can bring in some more tradables, we might still be able to get a good deal. But with the deal as it is, then yes, I can't do any better than this. Now, the next thing I want to mention is splitting the difference. And we've already talked about this before. If you're very nearly there and the salesperson says, "Ooh, split the difference." The answer is, "No, I really can't pay any more than this." And that will make them come down the full amount. And it may seem petty, it may only be a small amount, but this could make all the difference between profit and loss on a particular job. So the answer to split the difference is "No, I just can't." And when people offer to split the difference, it means they've already given up. So you can pretty much guarantee that they're going to say, "Oh, all right then." But if they do threaten to walk, you can always reel them back in and offer to split the difference of the difference. Or just to say, "Oh, okay, let's just do the deal then." So you've got nothing to lose by saying no to splitting the difference. And then finally, look out for the nibble. And I think when you're buying, the nibble is a significant risk. So the nipple is where you finish the deal, you shake hands, and then afterwards, the seller just casually, sneakily adds in some extra things. So the seller says, "Oh, by the way, "there is an airport tax on top, but it's not very much." Or they reduce what you're going to get. "Oh, by the way, just so you know, "it doesn't include delivery." And at this point, if you're not careful, all the profit on the job might slip away. So you mustn't let them nibble. And the nibble is dishonest, it's unethical, you can't reward nibblers. So it's absolutely vital that you say to them, "No, no, no, no, I was assuming it included delivery. "If it doesn't include delivery, "then I need to have a cheaper price "to allow for that extra cost." So you've got to say no. Now, the best way to prevent nibbles happening is to head them off before they even get a chance. So about halfway through the negotiation when you're talking about tradables, you should say, "Is there anything else I need to know about?" Because then if they bring up airport tax or delivery or something later, you can say, "Well, earlier on I asked "and you said everything was included." So is there anything else I need to know about is a really great way to make sure that you can't be nibbled later. So that's more or less it, but I want to finish by saying that, when you get to this stage, if you still haven't got a deal, you must be prepared to walk away. I know I've gone about this a lot, but it's really important as a buyer, even if you don't have another supplier at the moment, you've got to be strong enough to say, "Nope, I'm not prepared to pay more than that," and to walk. If you've carefully thought about your walkaway point beforehand, then it's absolutely fine to stick to it, and you must. You must walk and say, "No, I'm not paying that." Because it makes you stronger for next time. So always be prepared to walk away.
Note: This course was created by Chris Croft. We are pleased to host this training in our library.