The Upward Spiral

Have you ever climbed the spiral stairs of a lighthouse or some other tall building? I remember doing this with my children on several occasions. You think you are there, and then someone tells you there is more to climb! Unless you are really motivated, that extra upward effort can prove too much and you succumb to the downward pressure of gravity and your clinging children. The upward spiral in negotiation feels similar. You are sure you have reached the end and then your counterpart seems to have started all over again. It is very wearing and that is its danger.

This can be used by both buyer and seller. We may have got close to agreement in principle but then the other person lets time pass to lower our aspirations and does not send in the signed order form or does not ratify the agreement and then finds some way of starting the negotiation all over again.

I have seen this happen time and time again with salespeople. A salesman makes a sale and thinks he has agreed the terms. He tells his sales manager that they have a verbal agreement and they count it in the current month's sales figures. A few days before the end of the month the signed order form has not appeared. Suddenly now the sales manager is faced with a dilemma. He just has to have that business, because he has committed himself to the month's result. When he calls the prospective customer, the urgency will be clearly audible in his approach. The buyer will see the date, put two and two together and press for a better deal. In nearly every case the salesman or his manager will end up giving too much away.

As a means of using the upward spiral, it is a useful tactic for buyers to probe to find out from the salesman what pressures are on him or his company to meet monthly or quarterly figures. Ask the seller how his commission scheme operates, ask what figures are important to his company this month or this quarter. I used this tactic for one of my clients. I was negotiating on their behalf for some office equipment. We had secured some good deals but were unhappy with the proposal on fax machines. My client sends and receives over 100,000 faxes each year and we needed some robust, fast machines with specific functions. We approached the key suppliers, found some appropriate models and began to negotiate.

I knew which model we wanted, but could not achieve my target price. I did not want to pay for at least three months and my client could wait for delivery. The salesman had convinced himself he had the sale in the bag, so I stalled. I began asking the salesman about his own development within the company, his career, his commission.

From those questions I discovered that within one month he would be moving to another department. He needed to surpass a threshold figure, after which any sales brought in this month would be allowable as part of the commission scheme for his new job. My purchase could help him achieve that threshold.

I suggested that he take my proposal back to head office. My proposal was to buy at my target price. I would place the order now, and give him three post-dated cheques on the spot. He came back one day later and the deal was agreed.

Another variation is where buyer or seller may use the upward spiral by passing the final decision, or 'written approval', further and further up the management scale. In other words, they make it appear that they are not authorised to agree these 'additional points' - it must be referred to their superior. By inference, if we will drop these new requests or proposed changes they can still make the agreement. Call their bluff. They may be just as unwilling to start again as we are. You might start closing up your briefcase and say, 'I am sorry if we can't approve what I thought we had agreed. It may be that my MD will have to start discussions again with your boss.' It is usually enough; it is phrased in such a way that he can backtrack without losing face.

Upward spiral after agreement does sometimes happen even though it is unethical. I had a variation of this dirty trick played on me some time back. I was out with my family and some friends taking a walk in the New Forest. We stopped for afternoon tea in a tea-room and placed our order. We ordered tea to drink for four, three sodas and then asked for five scones with cream and jam. The proprietor said rather quickly, 'You want five cream teas', and we nodded assent without thinking.

You can guess the rest! The five cream teas included vast quantities of scones plus cakes, which we had not asked for. The price was of course far higher than the cost of five scones with cream and jam. It left a nasty taste in our mouths, not because we would have minded the proprietor trying to up-sell our order, but because it had been done in an underhand manner. The terms had been escalated unethically.

Sometimes if buyers do that to us, we can call their bluff again by saying that we will no longer do it for the original price and give them a new one. Then they have to negotiate all over again and may well be content to settle at the original price.