Just as toddlers must crawl before they walk, and couples court before they marry, negotiators should engage in competitive bargaining before moving to more collaborative modes. Here’s a cautionary tale: Eva was a graphic designer who attended our seminar in New York. Her team had designed a brochure she was about to take to their printer. I asked her, “What does a piece like that cost to make?”
Eva said, “I’m going to get it done for $4,500.”
“What was their starting quote?”
And she said, “Well, $4,500.”
“Did you try to negotiate with the guy?”
Oh no, Eva said, she couldn’t possibly bargain with him: “He’s my favorite printer, and he does really good work.” I found out that Howie—they were on a first-name basis—had even had her over to dinner to meet his wife and kids. He was a charming guy and a terrific salesman. Whenever Eva came to him for a proposal, he’d tell her, “I worked out a special price for you.”
In negotiating, regardless of the scale or context, information is power. When I asked Eva how much business her company did with Howie, she had no idea. She checked with her accounting people and discovered it was a lot of business—about $300,000 a year. For a one-man band like Howie, that figured to be at least a third of his revenue.
I said, “I think you’ve got a little leverage with this guy.” I told Eva to get two competitive quotes—something she’d never done before—and then to get back to me by end of day. The first printer she called came in at $4,200. The second printer, without prompting, bid $3,900. Howie’s price was “special,” all right. Eva was paying him a 13 percent premium for the privilege of staying on the “inside” of their relationship. (Howie’s stratagem inspired a new label for an age-old tactic: “Charm and disarm.”)