You can use the power of time pressure in negotiations. Use the take advantage of the “get-’em-while-they’re-hot mentality” to your advantage.
Some typical pressures in a negotiation could be to close a deal by the end of the month or quarter. That might be because of someone’s quota or a cutoff for a bonus. The best time to buy software is at the end of a quarter and the best time to buy a car is at the wintry end of December.
But while there can be plenty of good reasons to close the deal by a specific time, it’s just as important to understand and recognize if these time constraints are real or artificial and how time pressure be used against you in a negotiation.
Be Aware of Artificial Deadlines
We’ve all had the experience of walking down a city street and passing a food vendor calling out to “get ’em while they’re hot!” Or, for those who have spent time in the South, you know how alluring the flashing “Hot Now” sign at a Krispy Kreme can be. Buying a doughnut might have been the last thing on your mind, but the chance to get one fresh out of the fryer might be too good to pass up. It’s a great sales technique because it creates a sense of urgency.
But there are also plenty of times when someone might create a sense of artificial urgency and time pressure to try and close a deal. The pressure might be a company policy or because accounting must be done by a certain time, with arbitrary deadlines.
For instance, I know the CEO of one company who is constantly setting artificial deadlines, saying that if his team doesn’t turn things around by February, he will fire everyone. But placing these kinds of self-imposed and arbitrary deadlines rarely leads to the results he or anyone like him is trying to achieve. The fact that the threats are idle and the deadlines arbitrary causes everyone to ignore them.
The key is to be aware of how another party might be using this artificial time pressure against you, resulting in your signing on to a bad deal. It’s been my experience that nine times out of 10, the other side is making up the deadline to try and force an agreement in their favor.
Flip the Script
I’ll admit that it makes me nervous when people put time pressure on a deal. The first thing that pops into my head is: What are they hiding? I feel like they’re trying to rush something through so that I don’t find whatever they’re trying to bury. And the more someone continues to push to close the deal in a specific time, the more nervous I become. The balancing act is to keep things moving, but not faster than natural.
One way to understand if the time pressure in a deal is real is to flip the script on the other party by saying something like: “What happens if we go past the deadline?” The reaction or answer you get will tell you a lot about whether the deadline was real and whether you can now reset the timeline to work more in your favor.
Timing Is Everything
I have also learned through experience that even when it seems like timing is a crucial part of a negotiation, it might just be a mirage.
For example, when I was trying to buy a small instrumentation company earlier in my career. I put much effort into bringing the deal to a point that both parties had agreed. But then I got thrown a giant curve ball where I got the unique opportunity to sell the company I was running to a much larger firm for a great price. That was something I knew the owners couldn’t pass up.
Given the timing of everything, I also knew I couldn’t do both deals simultaneously. But I worried that by pushing off the acquisition, some other company would swoop in and steal it from me.
There is an old saying in the mergers and acquisitions world, “Time kills all deals.” The point is that by waiting to close the deal, I might not have an agreement to close. I liken this to parking my car in a tough neighborhood with the keys in the ignition, ready for anyone else to drive away.
But I decided to take things one step at a time. I closed the deal to sell my company and then, a few months later, circled back to that instrumentation company. And guess what happened? They were still ready to deal, using the same terms we had agreed to previously. Sometimes, time isn’t a factor.
Make the Best Deal–Not the Fastest One
We often work under artificial deadlines that shouldn’t come into play. Recognizing real and fake deadlines is a crucial skill for a good negotiator. Ultimately, our goal in any negotiation should be to reach the best deal, not how quickly we get it done.