Leverage is created in many ways, but is generally associated with your credibility to create costs or delivery benefits for your counterparty. It can also be created through social pressure by adhering common standards and norms like being nice, being fair, or delivering good work.
If the engagement is important and critical to improve your deal, spend time clarifying exactly what you want. When the opportunity presents itself and you create leverage, you need to know where you want to apply it. Have something in mind. Better to say, “I need this completed by 6:00 p.m. tomorrow without charging me for a rush order.” If you only get 1 thing to improve your deal, what would it be? What is your 2nd thing? What is your 3rd? Now, you are ready to create leverage.
By asserting that you have the right to get a custom deal, the other party may feel socially compelled to accommodate, and their conversation switches to which concessions they can and cannot make rather than whether they should make any at all.
• “I’m different” – Why should they be flexible and make an exception for you? You can be special in any number of ways – small business, local provider, pulled yourself up by your boot straps, kids in college, working your own way through college, longtime customer or supplier, great local brand, great growth story, great advocate, the list goes on...
• Appeal to what’s fair – Objective standards (i.e., – Kelly Blue Book values for used cars) are best, if you can find them. If not, framing the concession as “fair” can be a powerful motivator. “I understand that you can’t reduce your price 10%. Can you meet me half way?” In this case, you’ve just made a 5% cost reduction seem fair. Well done!
• Appeal to higher authority (and your counterparty’s pride) Some version of, “I know that your boss probably runs a tight ship and limits your flexibility. Do you think that it makes sense to take this to him to decide?” This engages your counterparties pride and may encourage them to make a concession just to show that they do, in fact, have the authority to do so. But use this tactic with care!
• Take me to your leader – Going to a manager when a conversation is not fruitful at a lower level can be a successful last effort. Often, the manager has greater latitude and more important problems to solve. Quickly making a small concession to get you on your way so they can deal with more pressing concerns can seem like a valuable trade off to them.
Finally, if all of your efforts are ultimately unsuccessful, realize that this negotiation is only for a point in time. Invest in the relationship by thanking your counterparty for their efforts to accommodate your requests and then shift your focus to ways to grow your leverage over time so that your next deal with them is a better deal for you. Mark it on your calendar.
Good luck!