Negotiation: Bluffing and How to Handle It
At the conclusion of negotiations, do not be surprised if the other side calls your bluff and changes the deal. Topic 78 provides some guidance on how to deal with this situation.
The reader is encouraged to take the time to read the text in conjunction with the referenced Appendices to gain the appropriate level of understanding of the subject matter discussed in the narrative. Appendices are either presented at the end of this and each remaining Topic or are available for review and download on this book's companion Web site (see the About the Web Site page for login information).
THE FOUR COURSES OF ACTION WHEN YOUR BLUFF IS CALLED
- When you are at the end of the negotiations, about to close, and the other side calls your bluff and changes the negotiated price (or risk assumptions) with the threat of walking from the deal if not accepted, what do you do?
- Initially, keep your emotions in check. Do not do anything other than ask why.
- The reasons for and the amount of the change matter here.
- Do the reasons resonate with you? Was something overlooked?
- Is there substance and validity behind the facts presented?
- Does the change emanate from material change in a critical value or risk driver.
- Do you have counterarguments that are equal in substance that meet the test of validity?
- Is a price reduction demand out of line, or is it reasonable given the circumstances?
- There are basically four courses of action:
- Agree to ...