Don't open first

- When you first go to see someone to negotiate there's a period called the preamble which is where you're kind of talking around the subject before either person makes an opening offer, how is business, have you had the car loan? That kind of thing. There's no need to rush through this phase. In fact, ideally you want to wait until they decide that the preamble is over and make their opening offer. So avoid making your opening offer first and encourage them to open. Just ask lots of questions and listen, because this is where you'll get information on their weaknesses. Maybe they'll tell you that they've looked at lots of houses and yours is the only one they like. In which case you think aha but you don't say it. And maybe they're the seller and they tell you that they're emigrating to Australia next week, aha. In some situations you have to open first. If you're selling something in a shop, for example or putting a house on the market, but if you possibly can avoid opening first, then you should. It's extremely beneficial to avoid opening for three reasons. Number one is that if they open first it might be good news. You never know. They might quote you a really cheap price if they're selling and if they're buying they might say how much they're planning to spend and it might be a nice large amount perhaps more than you were planning to ask for. Number two is that if you open first you might put your foot in it. If you're selling the price you quote might be stupidly low. And if you're buying and you tell them how much you want to pay, it might be higher than they were expecting. So they'll immediately put their asking price up. There's always this risk because you just don't know their situation. They may have a completely different view of the value of what you're offering or of what they're offering than you do. So play safe and let them open first. And the third reason is that you learn from their opening offer whether it's good or bad, it's key information and you can then change your position particularly if say you're selling and they mentioned a bigger budget than you expected then up goes your price. And if you're buying and they mentioned a cheaper price than you expected then down comes the amount that you might get it for. Of course the opening offer might be bad news but then it's just game on as usual. And if you get great news, maybe 20% of the time then getting them to open first is definitely worth doing. But what if they ask you to open first, what do you do? The answer is to chuck it back to them at least once. I'll show you how this might go both for when you're buying and when you're selling. Here's a short scene of me selling a training course and trying to avoid opening first on price. - Chris, do you think it would be possible for you to create 100% brand new course specifically designed for our company? - Yeah, I could do that. It would be tricky, but I could do it, yes. - Great, how much do you think that would cost? - Well, it would depend a lot on what you want to, what level of tailoring and things. Do you have a budget in mind for that? - Not really, I was just hoping we could start with you and find out exactly how much you would need. - Okay. Yeah, it's difficult to predict. Have you done similar courses to this in the past? What did they cost? - The previous ones were a little bit different so I'm not exactly sure if we could compare them. - Okay. Just out of interest, those previous ones, was there a kind of range from the lowest to the highest cost, what did they come in at roughly - Chris, I'm not exactly sure if this is the way we should approach it. I'd rather find out from you exactly how many hours you think you would need to design this and therefore get a cost from that. You think you can do that for me? - Yep, I could certainly do that. So this would be the price As you see I didn't succeed that time, but it was worth a try because sometimes it can work really well. I had a customer once who was let down by their existing training provider at the last minute and they were asking me for a price to help them out at short notice. And just before I quoted them a price increased a little bit because it was last minute and quite difficult. I remember this rule about not opening first. So I asked them how much the other person had been charging and they told me and it was far more than I was going to ask for. So I just said, "Well, I suppose I could do it for that." Trying not to jump up and down shouting yes. So they were happy and so was I. So do you tend to open first at least sometimes? Could you try pushing it back to them saying I'm not sure what do you think? Or do you have a budget in mind? Make sure you remember to try it when you next negotiate.