From the course: Negotiation Skills

Avoid final offers

From the course: Negotiation Skills

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Avoid final offers

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- I just wanted to say a little bit about final offers. As with many of these tactics, there are two parts to it. Should you say, "And that's my final offer," and what if they say, "And that's my final offer?" And there's an additional angle which is, what about asking the question is that your final offer? Should you ever ask that? And what if they ask you that question? So, you've got statements and questions and you've got you saying it and you've got them saying it. We need to look at all four of the combinations. So to start with, there are the two things that you might say, and the first one is, "And that's my final offer." And the second one is, "Is that your final offer?" I'll come back later to what to say if they make either of these statements. But first, let's just think about you saying either of these. Is it okay to say, "And that's my final offer?" No, definitely not. Never say it. And that's because if you say it and it's not true, what happens when you then have to move further from that point? You'll either look like a weak liar or you really will have to walk away from the deal when you didn't want to. You dig yourself into an unnecessary hole if you say it when it's not true. And if it is true and you really have reached your limit, then that's not so bad, except that next time you negotiate with this person, they'll just push you and push you until you reach your final offer and tell them. The whole point about negotiating is that at any point, you're implying that you're at your final offer when really you aren't. As soon as you give them any way to determine whether your position is really your final one or not, you've allowed them to push you right to that final point, which is your worst finishing point, the worst deal you can get. So never say, "That's my final offer," even if it is. Instead, just say what you always say, "I can't go lower or higher than that. I really can't." What about asking them, "Is that your final offer?" This is also a really bad idea because they can't really say, "Oh no, I've got loads more still to give you. I'm just pretending that this is as far as I can go." So they will have to say, "Yes, that's my final offer," and then you've made them dig in to a position where they can't move. They can't give you any more without looking like a liar. Now, why would you want to do that? And finally, what about if they say it's their final offer or ask you that question? And the answer is that you don't want to get dug into a hole and tradables are your way out. If they say it's their final offer, you can say, "Well, maybe we can find a better combination of tradables in order to find a deal." This allows them to continue to move without losing face. And if they ask you if it's your final offer, you can say, "Well, with this combination of tradables yes, but I'm hoping we can find a deal somehow. What else can you offer me?" And off we go again. So the simple message from all this is never mention the phrase final offer. Don't ask them if it's theirs. Don't say it's yours. And if they ask you, then waffle out of it using tradables.

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