Not sure if you do, but I love watching the hit television show Pawn Stars. If you are unfamiliar with the series, it features an owner of a pawn shop on the strip in Las Vegas. The main character in the show is a gentleman named Rick Harrison, along with his son and a few other employees. The premise of the show is to show people coming into their shop to sell items of value, memorabilia, and in some cases, items of historic significance. A variety of things have made their way into the production, from a Grammy Award to a New England Patriots Super Bowl ring. There is never a dull moment on the show. Before someone enters the store, the producers interview them, and the seller usually talks a little about the item, what they expect to get for it, and their walk-away price. I chuckle when I hear them say things like, “I will not take less than $1,000", or something to that effect.
Having watched the show for some time now, I realized just how bad people are at negotiations. Despite their plans, the sellers go into the process with most capitulating quickly to Rick and his staff. Many seem to leave lots on the table by not having an end game or knowing what they could obtain on the open market for their items. It seems like the lure of the TV lights take over, and all common sense leaves their bodies. Being in sales, we are called upon to negotiate frequently, so what does that mean for us, and do we act like Rick’s customers and just give it away?
The three main things I believe about the negotiating process is that people are, first of all, not good at this skill because they are afraid. Secondly, negotiating does not have to be a complex long-drawn-out process, as it is often not. We are somewhat tainted by a version of Labor negotiations that we have heard about with words like “marathon sessions” and “into the night.” These may add to our fear that negotiating is this sinister process to be avoided at all costs. Rubbish! And finally, most negotiators break the cardinal rule of the process by giving twice or negotiating against themselves.
Early in my sales career, a wise person told me if you do not ask for it, you will never get it. I sold a payroll service at the beginning of my sales career. In the sales process, I could, but would never ask, a customer for a setup fee for the product. It was a discretionary amount, of which I would earn 30%. Not asking for it was guaranteeing that I would receive 30% of nothing. One day I changed and overcame the fear of asking for it. Few, if any, ever questioned it, let alone negotiated it. And had they done so, I could have always cut it in half, or worst-case scenario, eliminated it. There were many fallback positions to call, but I had conquered my fear of entering a negotiation. I now welcomed it. Additionally, just because we might negotiate does not mean that it will be complex and drawn out. Sure, there may be times when this does occur on large deals that have extenuating circumstances, but the vast majority of what we do every day can be dealt with in shorter order by offering options to our customers.
Reflecting on previous negotiations, I remember one particular agreement where we were negotiating with a very large prospect who had read my previous company's terms, which stated that "they would be paid by a certain date." This was simply unacceptable to them, and they wanted to be paid faster. This was simply unacceptable to them, and they wanted to be paid faster. I thought about it for a little, consulted with some internal resources, and offered them an option. They could have the accelerated term, but we would have to charge them a nominal fee or things could stay the way we had originally presented them. The ask soon went away, and they accepted the original offer. Getting what they wanted with the additional cost was less appealing. In fact, what it did, was reveal they never really needed it in the first place. Now, if they had pushed hard, we probably would have granted them the concession, but we did not have to with the option offered. Despite my fear that I could lose this deal, I had to get rid of that fear to have a worthy seat at the negotiation table.
If you do decide to tune into “Pawn Stars,” you will see that many of the sellers negotiate against themselves. They will tell Rick they have to get $1,000 or whatever their price is. He will always tell them that that is too much and asks them about their bottom line. This skillful tactic is utilized to make a seller give twice without the buyer revealing their position. Now I know it is a TV show, edited for time, and all that, but most of the sellers give him another number before he ever commits to a price, thereby hamstringing their position. In my opinion, the correct response to Rick should be, “So, Rick, if it is not worth $1,000, what are you willing to pay for it?.” This approach would change the balance of the negotiation and force a counteroffer, helping them avoid capitulation.
Next time you are watching the show, don’t be like me, getting angry at the Television. Take stock of what you see and use it to help you avoid the pitfalls of an unsuccessful negotiation. And if you’re in Las Vegas, say hello to Rick for me, but whatever you do, don’t give twice!
Roger McNamara Bio:
Roger is a 25+-year veteran of the Payments Industry, most recently as the Director of Business Development with American Express in the US. He has worked on the largest Acquisition targets for acceptance across multiple industries and across the globe that include Airlines, Communications, Technology, Cruise Lines, Entertainment, Fractional Jet, Freight, Government, Healthcare, Insurance, Oil & Gas, Residential Rent, Restaurants, QSR’s, Retail, Services, Supermarkets, Travel, Vehicle Sales, B2B and Wholesale. Over that time, he has sold more than $200 Billion worth of Card processing and became an expert in Bankcard Interchange and Discount Rates, how they are calculated and what merchants pay to accept Credit, and how this is dramatically different from what they believe they pay. He is an expert in Merchant Statement analysis and payment processing and the rules and regulations associated with payments and the associations. Roger has also developed the insight for Merchant Services Salesforces and salesforces, in general, to be able to better position their products and gain share, particularly in B2B. Let him show you how you can too. He can be reached at Guide2Interchange@gmail.com