Negotiation Techniques: How to Build Lasting Value with "The Last Penny" Tactic
EXTRACTED FROM PODCAST EPISODE 18 – John Lowry
In a podcast episode at The Negotiation Club, we uncover an often-overlooked yet powerful tactic—The Last Penny. With negotiation expert John Lowry, we delve into how a final, seemingly small concession at the end of a negotiation can shift the outcome and strengthen relationships. This tactic capitalises on human psychology, ensuring the other party leaves the table feeling valued and victorious. By understanding and using The Last Penny effectively, negotiators can secure the deal and set the stage for future collaborations.
Master this subtle but impactful move to add a new dimension to your negotiation strategy.
Analysis of "The Last Penny" Negotiation TechniqueÂ
Mastering "The Last Penny" with Negotiation Cards
The Last Penny tactic can be a powerful tool when used thoughtfully, and preparation is key. This is where The Negotiation Club and our Negotiation Cards can help you refine your approach.
How to Improve Your Use of The Last Penny:
- Practice with Purpose: Regularly using our Negotiation Cards helps you practice timing and the art of making final concessions.
- Simulate Real Scenarios: We create practice scenarios where you can experiment with offering last-minute concessions that helps you understand these psychological impacts.
- Develop Strategies: Practicing with cards focused on The Last Penny enables you to develop strategies for offering symbolic value that reinforces relationships.
- Learn from Experts: Gain insights from experts who share techniques on when and how to give that final touch.
More Negotiation Techniques
More opportunities to discover Negotiation Skills, Tactics, Techniques and Strategies from 'The Negotiation Club Tactics Page'
How to Prepare to Use 'The Last Penny'
- Determine Your Final Concession Early: Plan a small concession you are willing to give up without sacrificing the value of the deal. This should be something that holds symbolic rather than significant economic value.
- Ensure Authenticity: Make sure your final gesture appears genuine and not calculated. If it feels like a ploy, it may backfire.
- Consider the Impact: Think through how this gesture will be perceived by the other party. Will it add genuine value to them? Does it align with their priorities?
- Keep It in Reserve: Hold back on offering the concession until the deal has reached a point where the other party feels satisfied with the terms. Then, present the concession as an extra benefit.
- Rehearse Timing and Delivery: Practice how you’ll introduce this last concession naturally and strategically, ensuring it comes across as thoughtful rather than a negotiation tactic.
Common Mistakes When Using This Technique:
- Misjudging Value: If the concession offered as the “last penny” is too insignificant or irrelevant to the other party, it may come off as disingenuous or even insulting.
- Overusing the Technique: Repeatedly using this tactic with the same party may make it predictable and ineffective over time.
- Poor Timing: Introducing the concession too early or in a way that feels forced can undermine its intended impact. The gesture should feel like an unplanned, generous addition.
- Over-Conceding: Making a final concession that is too costly or undermines the main terms of the deal can lead to regret and potential resentment on your end.
Importance of Practicing at The Negotiation Club
Understanding the theory behind “The Last Penny” is just the first step. Like any negotiation skill, its effective application requires practice. This is where negotiation clubs or practice groups can be invaluable so JOIN OUR CLUB TODAY (30 Day FREE Trial) :
1. Developing Intuition:
Repeated practice helps you develop a natural feel for when and how to build relationships, making it second nature.
2. Building Confidence:
Practicing in a safe environment boosts your confidence to employ these techniques in real-world situations.
3. Receiving Feedback:
Constructive feedback from peers and trainers helps refine your approach, ensuring you can build relationships effectively without compromising your negotiation goals.
4. Adapting to Situations:
Practice allows you to adapt your techniques to different scenarios and personalities, enhancing your flexibility and effectiveness.
Examples of The Last Penny in Action:
- Furniture Purchase Story: In a classic real-world example shared by John Lowry, a mentor’s experience buying furniture illustrated how failing to offer even a small concession—a $14.99 repair pen—left the customer feeling undervalued. Although the store made the sale, the rigid stance resulted in lost customer loyalty and negative word-of-mouth.
- Corporate Deal Closure: A software company negotiating with a large client on a service contract includes a final gesture: three months of free customer support. This minor concession doesn’t impact the company’s bottom line significantly but leaves the client with a sense of added value and appreciation.
- Real Estate Negotiations: A seller, after agreeing on a property sale price, offers to leave behind an expensive, desirable appliance (e.g., a refrigerator or custom blinds). This final touch secures the buyer’s satisfaction and sets a positive tone for potential future dealings or referrals.
By understanding the nuances of The Last Penny tactic, negotiators can prepare and execute it effectively to solidify deals while nurturing relationships. For those who want to practice this and other negotiation techniques, The Negotiation Club provides resources like our new Tactic Card named "The Last Penny," allowing participants to test and refine their skills in realistic scenarios.
Explore more tactics on our website and consider using The Negotiation Cards in your training sessions for hands-on experience.
