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Take-It-Or-Leave-It: When "Final" Isn't Really Final

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09/27/2013 03:10 PM

This entry will discuss a premature final offer and possible strategies to deal with it.  We are all familar when a negotiation party firmly states, "Take-it-or-leave-it", asserting that they are at a final offer and you cannot do any better.  Often, this tactic is just a way for the party to try and anchor and "win" the negotiation by showing they can't budget.  This tactic may not come accross so brash, it may be presented in a "hand-tied" sort of way, with the party simply saying the offer is final, when it really is not.

So what can be done when the opposing party states the offer is final when really they have not hit their actual bottom acceptable range and you cannot accept the "final" offer?  Perhaps the best strategy is to Call Time-out, with a twist.  Traditionally when Call Time-out is employed the negotiator simply asks for time to think about it.  In a Premature Final Offer situation, the Call Time-out strategy is to inform the party that you cannot accept the offer and as such you are ending the negotiation.  Additionally, the negotiator could leave the "door open" to further negotiations by stating so.  The time-out provides the final offering party the time to realize that the negotiation tactic may have jeopardized the negotiation.  This bite is lessened of course if the door is left open, but in either scenario the message is sent that the premature final offer or tactic is not acceptable.

An additional strategy would be to first Identify the strategy and then Call Time-Out.  Again, a small twist to the strategies would be used.  For example the strategy would essentially be saying "Well if that is really your final offer, then I cannot accept it.  Perhaps we take a break and your side and our side can review the numbers to see if that really is the best we can do."  Such a strategy helps to tactfully identify the tactic and then use the time-out to see how final the offer really is.  This may be a preferred strategy when dealing with an unfamiliar negotiation partner.

A third helpful strategy, combined with either of the other two or alone would be to Add or Change Players.  Perhaps just the current negotiator is a "Take-it-or-leave-it" person and by adding or changing players you will get someone who is willing to engage in a more integrative negotiation.  

On somewhat of a side note, a Final Offer may be a strategy in a situation when one negotiator does not have the power the other party does, but they have multiple options.  For example, when negotiating for perishable services such as a hotel room, the person searching for the room may ask for rates.  If the rates are too high, the guest may state what their final "offer" would be.  If the hotel does not accept the final offer, then the guest should state that unfortunately that is all they are able to pay and that they want to leave their contact information if the hotel is able to accomodate that price.  This leaves the door open to accepting the final offer (and perhaps getting a great deal), benefiting the hotel by selling an unused room and still collecting some money.  This strategy could be done with multiple parties to try and secure the final offer price.  With this in mind, also realize that if you wrongly identify a premature final offer or you turn this strategy into a tactic, the other party may have multiple sources as well and even a premature final offer will be taken by someone else.

Have any take-it-or-leave-it stories?  Please share in the comments.

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