Higher Authority - Building
Contractors
Whether you are the CEO, the owner,
the 100% shareholder of your company, admitting this
straight away will leave you with a weaker hand later in the
negotiation stages.
How is this so?
Let’s imagine for a moment you are the
owner of a successful Building company and you are looking
to buy roof tiles from a tiling company. You tell the tiling
company you are building ten homes and therefore want the
best possible deal on tiles and are willing to pay in cash
if the figures are right.
The tiling company quote you 1000 euro worth of the tiles
you are looking for, per house.
You gasp and say “No way, I won’t pay that. 800 euro is all
I can afford.”
The tiling company respond with
“But surely, being the owner of your own business you know
the value of good quality. But if you can only go to 800
euro I can show you our lower quality tiles”.
You respond with “No way. I want those tiles for 800 euro”.
The tiles company are now in a position to find out just how
flexible you are.
“I can’t possibly do that for you for 800 euro. Tell you
what, if you are seriously interested in purchasing these
tiles then I may be able to get you a discount but I would
have to check it with my boss. If I can get it for you are
you interested?”
You respond energetically with
“Well of course I am interested. What sort of discount are
you talking about?”…
And so the tiling company knows they can budge you from your
800 euro budget by you agreeing to see what is in offer with
the discount.
So how do we over come this negotiating tactic like the one
employed by the tiling company?
Always use Higher Authority. Tell them whatever you
like, but don’t let them know you are the key decision
maker.
What I often tell my clients to do is agree up front with
what has ever been proposed to them. Then tell them you will
have to take their proposal to your committee members/line
manager or whoever you have planned as your Higher
Authority.
But if you are the decision maker, don’t let your ego get in
the way! Use a Higher Authority.
So let’s imagine you use this Higher Authority in the
above situation. You have agreed but have insisted you must
mention the deal to your chosen Higher Authority. The
ace up your sleeve here though is that you can say to the
deal proposor, “It’s a shame we can’t get this deal sorted
today. Had you come in a couple of hundred euro lower then I
was given the authority to go ahead and secure the business
today. Let’s see if we can do this today can we? After all,
we have spent so much time on this it would be a shame for
it all to fall apart right now over a couple of hundred
euro”.
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