There’s a truly terrible negotiation technique that people routinely use. It’s not only awful for negotiation, it’s awful for your soul.
Here’s how it plays out: Person A attempts to initiate a transaction. Person B shows the tiniest, slightest bit of hesitation. Person A then immediately – and unprompted – drops their prices.
Mike: “Hey, would you like to buy this bike for $100?”
Mary: “Well, I don’t really…”
Mike: “50 bucks!”
First and foremost, the second you drop your price without some sort of actual transaction, you immediately lose all credibility. It sounds like your initial price was an inflated lie. So why should I trust your new price? Every word out of your mouth is suspect now, and I certainly won’t trust your valuation of whatever you’re trying to sell.
Second, most people do this before they even know what the objection is! Heck, some people do it before they even get an objection, like Mike. When someone doesn’t want to agree to your deal, sometimes it’s about the price. Often it’s about trust, or need, or rapport, or some qualifying consideration that has nothing to do with the nominal price range. If someone doesn’t want your bike at $100, there’s only a tiny chance that they’ll want it at $50 – and you’ve reduced the odds that they’ll trust you enough to buy it at any price by pulling that move.
Lastly, this is just so damaging to your own self-worth. Understand that I’m not just talking about selling bikes here. “Price” can mean a lot of things. Consider this similar interaction between Mike and Mary:
Mike: “Hey Mary, want to go see a movie with me on Friday?”
Mary: “Well, I don’t really…”
Mike: “It doesn’t have to be a movie! Anything you want!”
It’s the same thing. Mike attempted to initiate a transaction – the two of them, hanging out. Mike’s “price” was willingness to see a movie, presumably because he wanted to. The second Mike sensed hesitation, he dropped his price – from “willingness to see a movie” to “willingness to do anything at all.” If Mike and Mary are friends, then he’s devaluing himself by immediately dismissing his own wants. Just like with the hundred-dollar price tag of the bike, he’s saying that his own valuation of how much he’s worth was an inflated lie that even he didn’t believe and that crumbled under the slightest wind.
When the other person turns you down, your internal thought process sounds something like this: “Jeez, even though I dropped my prices, they didn’t buy. That means that even my lowered price was too high, so whatever I have to offer must be worth even less than I thought.” And that’s a bad thing to think about a bike – and much worse to think about yourself.
The reality is that they didn’t turn you down because of your price. They turned you down because that negotiation “technique” ruins your credibility and rapport. It makes you seem like a desperate liar, and no one wants to buy a bike from someone they perceive to be a desperate liar. They don’t want to go to the movies with them, either.
Now, that’s not to say you can’t ever negotiate your prices. But that’s different! If someone offers you $75 for the bike after you say it’s $100, then maybe you can haggle. If someone tells you that they’re not into the movies this week, but they’re willing to treat you if you grab a burger instead, then we’re in business. Negotiating your price isn’t the same as dropping your price. Negotiating is a win/win. Dropping your price is a lose/lose.
The Opportunity Machine 