Since I received so many emails after last week’s blog, I’ve decided to stick with the theme of negotiation and discuss single variable negotiations.
At a conference recently where I was speaking on negotiation theory, someone from the audience asked how he could use negotiation theory to help him negotiate a better price for the purchase of his apartment from his current landlord. He had been a tenant for 10 years. The landlord had decided to sell and he wanted to buy. The landlord however, was holding out for a top price and the ‘loyal tenant of many years’ felt he deserved special treatment. Was there any way he could use the negotiation power techniques I had introduced in my presentation to help negotiate a lower price?
The short answer is not easily and that is because most private property negotiations are single variable negotiations. In this case, the single variable is price, and that is the only thing either negotiator cares about.
As can be seen from the landlords position, he didn’t care about the relationship with the tenant, he simply wanted to maximise revenue. This is because after the sale of the property, he never expects to see his tenant/buyer again. The buyer has no value to him beyond the sale.
Such negotiations are less common in business where there are usually other variables in play such as the business relationship. In order to keep a good relationship that can be leveraged in future deals, some price flexibility is common – even in property transactions.
So back to the question how can the tenant improve his chances of negotiating a lower price from the seller? The obvious answer is to try and play the emotional card and hope for empathy from the landlord. Focusing on how good a tenant you have been is hopeful at best and cannot be relied upon. If you have made any renovations which have added value to the property there is more likelihood of traction. However the real answer is within the statement above that “the buyer has no value beyond the sale”. We need to change that dynamic.
Making yourself valuable to your counterparty beyond the deal you are working on is (or at least should be) standard fare in business negotiations where there are multiple variables on the table. Often, we can focus on the variables where we have competitive advantage to create value and thereby negotiate a more acceptable deal package. These variables may include future deals, schedules, quantities, legal clauses, last look provisions, service provisions etc.
In single variable negotiations where none of these options exist, we need to create them. Returning to the example of the landlord and his tenant; Apart from owning property, what does the landlord do? Does he have other business interests either directly or indirectly where you can add value? Are there areas of interest you have in common such as investments, charities, hobbies etc? Any of these can add a variable to the discussion and create the ultimate variable in negotiation; relationship.
For my audience member it was too late to use this tactic. If you are going to add variables to a single variable negotiation you need to start the process early; it takes time and effort to research your target and then to make yourself relevant to them. However, I promise you, do this correctly and you shift the negotiation dynamic in your favour.
If you do want to learn more on how to shift the negotiation power in your favour, sign up for my online ‘How to develop Negotiation Power’ training and learn 12 strategies for shifting the negotiation power in your favour! As a subscriber to my newsletter I’ll send you a 50% discount code – email me if you’re ready to sign up.
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