Negotiation Tactics: What a tiny Indian retailer taught me about negotiation

negotiation tactic indian retailerNegotiation is one of the hottest running topics on this blog. Right from sharing negotiation tips from age old stories to negotiation tactics that even a cute baby can teach you, we have done it all. But this ones interesting – Negotiation lessons from small indian reatilers that I learned during my childhood days.

The Drip effect in negotiation

Every one wants to get the max out of a deal whether its the buyer or the seller. So how do you settle a negotiation? Indian retailers have a nice trick up their sleeve. While I have not read this in any modern negotiation workbook so let me have the freedom to call it the ‘Drip Effect’.

The logic here is pretty simple and straightforward. Give what you are supposed to give drop by drop. Lets take an example – If you are going to buy 5 kilograms of wheat from the local vendor. The scale in those days wasnt electronic. The old time balance which had 2 plates on both the sides with a needle poiniting which side is heavier.

The game begins

scale balanceOnce the scale shows that 5 KGs is done; all a customer would be happy with is a little more to be poured into his side of the scale. Finally 5 KGs is what you already paid for, right? You need more to conclude this as a great bargain.

The vendor in turn has a simple negotiation tactic. Though he knows how much wheat will be 5 KGs, he just pours in a bit less than that. Your eyes are glued to the scale. He has your time and attention and he is well aware of that. He drips wheat into the scale part by part. You would never realize when 5 KGs will be done.

Once the needle shows the sign that its almost 5 KGs, he drops the last installment and bang you go. He picks the plate and starts packing your stuff. If he knows you are a stingy customer, he just picks the plate first when it reaches 5 KGs and then adds a few grains of wheat more to it. You know he added extra but you dont know how much.

Its a win-win game here

On actual weighing; the packet will probably be a percent or two more that what you are paying for. This is no big deal! And you know that. Still you are happy. That something extra actually brought smiles on faces of so many buyers. You know Asians are good deal hunters (smile). The retailer in turn had a set of dedicated customers gained.

With two shops selling the same wheat, this 1% became the differentiator. No body did a valuation of this extra wheat but their brains knew that they are getting extra which was enough for them to be happy about. The other retailers never realized this and even the customer will never go and ask “Add a few grains more” Remeber we discussed ZOPA in negotiation. This 1% ensured that your ZOPA actually met.

Use this Negotiation tactics today

What extra can you add to your customer? Some value add to existing product. At times things which can be easily bundled without compromising profits make your offers worthwhile and negotiations a success.

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