In which we are urged to protect our profits in escalating negotiations.
My wife (who expertly manages our household day to day) sometimes asks me to run errands for her on a Saturday morning. Typically, we discuss her list and I head out the door. Then the most amazing thing happens.
Within about five minutes of my arriving at the first destination, she will call my cell phone and say, “While you’re there, could you also pick up….” or “while you’re over there, could you also stop at ABC store and pick up ___.?” I agree.
Then, almost invariably, as I arrive at ABC store, my phone will ring again. “I just thought of something else. Could you please go to __ and do ___?” This pattern has been repeated as many as five times in a morning, stretching a list and an hour of errands agreed to three hours.
This is a variation of what’s known in the sales and negotiation trade as “escalating demands.”
Our clients do this too, particularly now, in hard times. We discuss a purchase. We agree on scope and price. A few hours or days later, they call and say, “We’re still on track, but, could you squeeze this into the deal for the same price?” Seeing their request as small, not worth upsetting the whole process for, we say, “yes.” Then, they call again.
They might nibble at this cheese several more times, escalating their demands, each time assuming little or no price change. Before we know it, we have negotiated the profit out of our deal by agreeing to these “escalated” additions. The equivalent of a three-hour Saturday morning errand vs. the originally agreed hour.
So, how does one deal with this? Deadlines and boundaries. At home, once the list is agreed, I’ve sometimes boxed it in, saying, “Happy to run these errands for you and I need to be back by 1:00 pm because at that point, I have to……”
In sales negotiations, instead of “…be back by 1:00 pm,” it’s “This price goes with this package structured this way and expires on date X; a change in any element means a change in the package price.” Then, when the escalating demand comes, we ask for something in return, even if small. “I’ll be happy to do that for you if….”