#821 It must be a bloodletting

On July 2nd in blog #819, I told the story of how I learned about negotiation at 8 years of age.  It was that day, in my Dad’s truck, that I first understood the importance of value.  If you haven’t read it, go back and give it a read before you read today’s post.

In my live sales seminars, I often make a mock car sale.  I pick two members of the audience and tell them that I have a used car for sale, and I am asking for $10,000, and they will each, separately, try to buy it.  They are allowed to make up any story they want to negotiate the price.  They can point out a dent or say the tires need to be replaced soon or that there is a rip in the upholstery.  I send one person out of the room and begin the sale with the other.  She offers me $8000 saying that bumper has rust on it and the tires look old.  I come down to $9650 telling her how I changed the oil every 3,000 miles and tuned the car up every fall. She says her neighbor has a similar sedan, only slightly older and is asking only $8500 then offers me that sum. I tell her a guy called me on the phone and sounded like he was willing to pay full price and maybe I should hold off until he can get here tomorrow.  We go back and forth a few more times, and finally, I say, if I am willing to go below $9,000 can we conclude this now.?  We settle on a sale price of $8850.  I ask her if she thinks she got a good deal and she responds, "Yes I think I got the price down to the lowest you would go, and it is over $1,000 less than the asking price.”  
I then bring the second buyer in from outside of the room.  He has no idea about our back and forth negotiation.  He doesn’t know we settled at $8850.  I begin the mock sale again telling him my asking price is $10,000.  He offers me $7500.  I shout “SOLD!”  Then I ask him if he thinks he got a good deal.  He invariably tells me no, he does not think he got a good deal.  He says he should have offered less.  The difference here is obvious, isn’t it?  The second bidder got a much better deal than the first, yet the first felt that she got a good deal and the second guy did not.  VALUE.  VALUE.  VALUE.
In the first negotiation, I held on to my price.  Each concession was small telling my buyer’s subconscious that I valued each dollar I was letting go of and that they would not come easily. (One of my rules of negotiation is that every concession needs to be a bloodletting).  The perceived value of the car was higher because of my attitude during the sale process.  
With the second buyer, I broke that rule.  I did not infuse any value.  I gave it away like penny candy.  In other words, it was valueless to me.
The subliminal message told my buyer that the vehicle was, in fact, worth far less than $7500 and I was happy to beat him by taking that price.  

Own your sales gene...