PurchTips - Edition # 187

 

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Negotiation Brinkmanship Do's & Don't's

By Charles Dominick, SPSM, SPSM2, SPSM3

What Are The Secrets Of Effective Brinkmanship?

M-w.com defines brinkmanship as "the art or practice of pushing a dangerous situation or confrontation to the limit of safety especially to force a desired outcome." In business, brinkmanship is pushing a negotiation to the point of nearly killing a deal in order to achieve the most favorable terms when that deal is finally agreed upon.

Brinkmanship often produces a negotiator's greatest successes but can also result in the worst mistakes and, therefore, must be used carefully. Here are some "Do's" and "Don'ts" for using brinkmanship when negotiating.

DO: Do use brinkmanship when at least one alternate supplier has comparable cost, quality, service, availability, and financial stability.

DON'T: Don't use brinkmanship if your organization would have to negatively alter its entire business model if you no longer have the option to use the supplier.

DO: Do use brinkmanship at the end of a long, deadline-bound negotiation. A supplier that has spent much time and effort trying to earn your business will want that effort to result in a sale rather than nothing.

DON'T: Don't use brinkmanship when a supplier hasn't yet fully engaged or has time to adjust its strategy.

DO: Do use brinkmanship on a worthwhile term.

DON'T: Don't use brinkmanship on an insignificant term - the risks are too great for something immaterial.

DO: Do set your target substantially past the supplier's expressed limit. Demanding a concession that's a "no brainer" for the supplier will fail to maximize your gain.

DON'T: Don't set your target unrealistically far from your supplier's expressed limit. While a 26% discount proposed after a supplier expresses a 25% limit would be a "no brainer" for the supplier, demanding 50% at the last minute may make the supplier withdraw.

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