Why Take-It-Or-Leave-It Is Not a Good Negotiation Strategy
There exists and old saying, something of something is better than 100% of nothing. This saying is a perfect bridge to a conversation on the “take-it-or-leave-it” tactic in negotiations.
I’ll address three questions here
- Is “take-it-or-leave-it” a good tactic to use? Should it be used?
- Unfortunately, the answer, like so many things in the world we live in, is, it depends.
- What is a better choice? Good defense?
- Get more creative for gosh sakes!
- When should it be used?
- Occasionally, but not as often as many people think.
Is “take-it-or-leave-it” a good tactic to use? Should it be used?
The short answer – it depends.
Typically, “take-it-or-leave-it” is used at the end of the road. The parties are deadlocked. There is simply NOTHING left to negotiate.
Assuming that is indeed the case, though I’ll argue further on down that this is very rarely the case, this tactic is indeed acceptable and encouraged. While no one wants to “lose”, everyone should be eager to get to “yes” or “no” as efficiently (not necessarily as quickly) as possible.
Take-it-or-leave-it is a construct designed to put pressure on the other side. Make a decision. You are about to lose. This is the best my side can do. More often than not, the other side’s reply will be “Fine, I’m out”. Leaving the “offeror” 100% of nothing.
Which opens the door to the next point ….
What is a better choice? Good defense?
Simply get creative. Remember, its not the price, it’s the package.
Clients ask me all the time, “Give me a better price”. My reply, “OK. Give me a 10 year deal and pay me in advance”. You can quickly see my point, if we can’t agree on something, can we agree on something else? Yes – its that simple. Start playing around with the terms and conditions; length, payments, various clauses, follow on work, site acceptance, liability language, ….. There are dozens and dozens of “regular terms and conditions” as well as dozens of more creative ones “introductions, access, information, secrecy, ….”
The defense is to give choices. For example;
- I’m willing to do
- A – standard offer
- or B – slightly more complex and costly
- or C – slightly less complex (de-scoped) and less costly
The other side will most likely reply as follows; I’d like B at C’s price.
Indirectly they are now negotiating and they don’t even know it. They are “in the dance”. The conversation will now shift to a more traditional negotiation with phrases such as “yes, I can do that IF you can do this for me”, or “No I can NOT do that , but I will do this, IF you do this for me”. The A, B, C creativity construct opens up the dialog.
By the way, children know this instinctively. I made this comparison over a decade ago. https://www.youtube.com/watch?v=iql5pZa5MKI
When should “take-it-or-leave-it” be used?
In short – rarely.
The times I would use the tactic include;
- I’ve truly feel I’ve exhausted all options, including any creative ones
- I feel the outcome is beginning to look like a win-lose
- I want out if it gets any worse for me
- I want “bad news” now, so I can move on to “better news” elsewhere
- I feel the other side isn’t taking me seriously and I’m prepared to put them on notice; “pay attention or I’m out of here.
In closing, try harder to be more creative. Offer choices. Why? Because something of something is better than 100% of nothing.
Raise the Bar!