Every time I write about negotiation, I tend to get a lot of interest. That makes sense because all of us deal with some form of negotiation in just about every aspect of our lives. That’s especially true in business, where so many decisions must be worked out between two parties looking out for their interests.
It turns out there is a technique you can use in just about every negotiation that can give you an edge. But, if you do use it, you need to be extremely cautious because it walks a fine line between honest and dishonest dealing.
“I Need to Ask My Manager…”
There can be a temptation to approach a business negotiation with an intent to “win it”–to make sure you come out on top or gain an edge. And there is a technique that many people turn to when they want to achieve this edge. It’s called “Higher Authority.” It’s when, after the person you are negotiating with thinks you’ve agreed, you call in someone above you who has the authority to decide on the deal. It can be highly effective, but it also chills over the entire conversation.
This has happened to anyone who has bought a car at a dealership. You walk in and are promptly greeted by a salesperson who answers your questions and helps you test drive cars you might be interested in. At some point, you decide you want to buy the car, so you sit down at the salesperson’s desk to hammer out the price. After perhaps a bit of back and forth, you think you’ve agreed. But then what happens? The salesperson says they need to talk to their manager before agreeing on that price.
You know what happens next. The salesperson walks away out of sight to find their boss. Maybe the two of them discuss last night’s big game over a cup of coffee–before the salesperson walks back shaking their head. “Sorry, my boss says we can’t do that price. But we can do this instead.” Inevitably, that price is higher than the one you had already agreed to. It’s frustrating, right? But what can you do? If you want the car, you need to agree to pay the new price.
A Risky Tactic
Our car dealership example shows that employing “Higher Authority” in a negotiation is effective–but it certainly doesn’t build trust or long-term relationships. But we still see this same tactic used in the business world all the time. Someone will enter a negotiation, come to an agreement, but then say they need to talk to their manager or the committee before signing the deal.
It’s risky because your customer or potential partner might feel taken advantage of in a way that they’ll never want to buy from you again. That’s because people on the raw end of this tactic might feel the deal was negotiated in bad faith or even with a lack of integrity.
How do you counter this technique?
Establish The Ground Rules
Whenever you’re entering a negotiation, it’s critical to set the ground rules right off the bat by asking the person you’re working with whether they have decision-making power or not. Ask something like: “If we agree today, can you agree to sign the deal?”
If the person says no, they’re only authorized to negotiate, but they can’t agree to the deal on their own, then it’s time to hit the pause button. It’s a waste of your time. Let the other person know that you’re not interested in negotiating any further until the people who can say yes to the deal can get involved. If they are unwilling to do that, then you know it’s time to back away altogether. They’re not interested in negotiating in good faith.
Be Ready for The Extra Nibble
When someone refuses to bring the decision-maker into the negotiation, you can count on one thing: that other person will want an extra nibble in the deal. I speak from experience. There were multiple times when this situation unfolded for me throughout my career when the person I was negotiating with didn’t have the final say on a deal. Whenever this happened, my tactic in response would be to hold something back–to not give everything I could during the negotiation–because I knew whenever the Higher Authority entered the picture, they wanted something extra and I was prepared to give.
So, whenever you’re about to enter a negotiation, establish who you’re negotiating with right at the start. Does this person have the decision-making power to make a deal–or not? If they can’t, ask to get whoever that person is involved. If they refuse, consider walking away or holding something back during the negotiation. Because, in the end, the Higher Authority will want an extra bit.
Employing the Higher Authority as a negotiating tactic is powerful–but you need to be cautious in how you use it–if you use it at all. Because if you don’t like it when it’s used against you, you can bet others feel the same way.