Negotiating – Aim High and watch out for ‘Split The Difference’!

Your starting price and terms for your negotiations should be the highest you could possibly justify for your product or service. The closer your starting point is to what you are prepared to accept, the less you have left to negotiate with and the less likely you are to be happy with the outcome.

A classic, although not necessarily sophisticated, negotiating tactic which will often be used on you by your prospect is the ‘split the difference’ technique. You state your price, the buyer makes a deliberately very low offer, and after a little discussion they raise their offer a tiny bit and then suggest you split the difference. If you started low, you do not come out of it too well if you agree to the split. Remember that it is very easy to get drawn into agreeing to this offer because it sounds fair. Most times it is not and does not create a win-win situation. The buyer knows it is not fair and you can always say ‘NO’.


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