What do you do when you’re given a take-it-or-leave-it ultimatum in a negotiation? If you’re an experienced negotiator, you’ve probably been faced with this situation at some point.
Any negotiation requires give and take on both sides. But every once in a while, you run into someone on the other side of the negotiating table who thinks win-win means they win twice. This short-term approach can be frustrating, but there are steps you can take to navigate through it.
Take These Steps to Navigate Ultimatums in Negotiations
1] Recognize the Power of Prevention
First and foremost, try to prevent reaching such an ultimatum. The adage “an ounce of prevention is worth a pound of cure” is certainly true in negotiating.
Some personalities naturally work better together than others, so always research the person on the other side of the negotiating table before you sit down with them. Look them up on LinkedIn, YouTube, and Facebook. Talk to their peers, suppliers, customers, and anyone in your organization who may know them. If your research tells you they are a desk-thumping, up-in-your-grill negotiator, then spend more time trying to build rapport and getting to know them rather than jumping straight into the negotiation.
Work to discover if you have any common interests; these anchor points can be used during a negotiation when both parties are near gridlock. Then, if you find yourselves at an impasse, recommend that both parties take a break, allowing you to talk about those common interests.
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2] Know Thyself
It’s essential that you know your triggers. Are there things the other party can say or do that would set you off? When negotiating, never lose your cool because doing so puts you at a disadvantage and you may say something you regret.
And, if the other party does set off one of those triggers, simply ask for a break. Breaks serve as an opportunity for both parties to refocus, and they can deescalate a tense situation.
If you are given a take-it-or-leave-it ultimatum, don’t take it personally. Yes, it’s your job to look out for what’s best for your employer, but your job is what you do, not who you are. Getting upset won’t help you or your employer. Ask for that break.
3] Give a Little, Get a Little?
When you resume negotiating, try to rewind the negotiation to points of mutual agreement, then talk about the shared benefits of an agreement. Focus on the end goal for both parties.
If there are some areas you can give a little on to show good faith, then consider doing so. This doesn’t mean giving in on everything. Give something small and see if the other party reciprocates. Most people will want to give a little back when the other party has done so. That’s the law of reciprocity.
If they don’t, then ask how the negotiation might move forward. Discuss whether there are opportunities to make a bigger pie for both parties—after all, it’s easier to find common ground when there’s upside potential for both. Remind the other party that you just gave them a good-faith concession and would like to keep the momentum going, but point out that it will require effort from both sides.
If they continue to offer the same take-it-or-leave-it response, then reevaluate your options. Make sure you know your best alternative to a negotiated agreement. Is the take-it-or-leave-it offer better than you can get anywhere else? If so, you must stay in the negotiation and try to improve your position. However, if it’s not as good as your alternative, then the best response to a take-it-or-leave-it demand is to just leave it. Nothing sends a more lasting message to an ultimatum than to simply walk away.
Nothing sends a more lasting message to a take-it-or-leave-it ultimatum than to walk away.
Remember to make a note in their file of exactly how things went down. Strong economies come and go. If you’ve been in this industry as long as I have, you know that some companies don’t always treat you well during good times when they have all of the business they want. But those same companies will come back to you, as if nothing ever happened, when things slow down and they need work.
Always be professional, but remind them how your two companies parted ways due to their take-it-or-leave-it approach. Let them know you appreciate them taking the time to call you, but that you prefer working with people who appreciate your company’s business—in good times and bad.
4] Get Creative
If your alternative is no better than the take it or leave it, then continue with the negotiation. What items can you add to the negotiation to meet their demands? Perhaps you can expand the scope, get a higher quality material, reduce their time on your jobsite to improve your cycle time, get a priority guarantee, have them put their best crew on the job, or get an extended warranty. Always try to get something when you give something.
If that doesn’t work, then try escalating the issue within their organization. Sometimes changing the players can reset the negotiating atmosphere. But be careful with this strategy and only use it as a last resort because resentments can linger when you go above someone’s head in a company. That said, there are times where it’s warranted.
And what do you do if you’re negotiating with the person at the top? Look for customer advocates within their organization. There may be a salesperson, customer service representative, or someone else who values your business more than their boss does. It’s helpful to have an internal advocate to plead your case.
Finally, if you absolutely must accept a take-it-or-leave-it ultimatum, try to give yourself an out. After all, circumstances can change—companies are bought and sold, new entrants offer alternatives, people retire, and markets turn. You don’t want to be locked into a long-term deal that’s bad for you, so try to negotiate a termination for convenience clause into your contract.
And while this may be the best deal available right now, that doesn’t mean it will be the best next week or next month, so spend some time each week looking for a better alternative. Once you find it, convert your business to someone who appreciates it.
5] Take Note for Next Time
I also always recommend an after-action review. Document what went right and what went wrong. What led up to the take-it-or-leave-it ultimatum? You may have done something to the supplier or trade that prompted it. Reflection is the best way to avoid repeating past mistakes.
On the other hand, you may not have done anything at all to deserve the ultimatum. Sometimes the other party’s demands are based on their best option at the time. As much as we’d all like to think that both companies are considering the long term, it simply isn’t always true.
Whatever the outcome of a negotiation, there are lessons to be learned. I have had formal training from leading negotiation skills providers, as well as training in college and seminars at Harvard University. I’ve read dozens of books about negotiating and have also taught negotiation skills for years, but the lessons I remember most are those I learned from my own mistakes. When it comes to negotiation, be a continuous learner.