It's better to be the 'yes' man

PUBLISHED : Sunday, 19 February, 1995, 12:00am
UPDATED : Sunday, 19 February, 1995, 12:00am

There are huge dividends to be had in seizing the chance to greenlight a deal away from your negotiating partner.

I'VE always placed a high premium on the right to say 'yes' in any negotiation. It means I have the final word. I control my own destiny. I can end the negotiation whenever I choose. I'm not hanging on every whim and word of the other fellow.

As a manager, I almost always have the final word in a discussion. After all, I'm running the company. In a negotiation where I am a buyer of other people's products or services, I also retain the right to say 'yes'. After all, the other side is importuning me to give them my money. They can't do a thing until I agree.

Unfortunately, in our business, I'm more often the seller in a negotiation. I'm the fellow importuning the other side to say 'yes'. As a result, I've become a connoisseur of openings which allow me to turn the tables on the other side and grab the right to say 'yes' for myself. Such openings don't appear that often, but they do seem to crop up when one side is trying to shut out their competition. I've learned this the hard way, often when people have wrested the 'yes' from me.

A few years ago, we licensed to a British manufacturer the rights to use a client's name on a sportswear line in the UK. The sale, which was conducted by a formal auction among several companies, generated a handsome guarantee against royalties. Our success in the UK market encouraged us to set up a similar auction in North America. But we never got a chance. An American entrepreneur had somehow got a hold of our British proposal and fallen in love with the project. He called me up and said, in effect: 'I want to sell this product line.' I said: 'Well, we were going to submit it to several companies to gauge their level of interest.' 'What kind of money are you looking at?' he asked.

'I have no idea, but given the bigger size of the US market we're hoping for at least four times the UK guarantee.' I thought this was a deft move. I knew he knew we had received ?200,000 (HK$2.4 million) in the UK. By establishing the multiple of four, I had anchored our North American price tag at US$1.2 million (HK$9.3 million). If that didn't scare him off, he could certainly join in the auction. I was looking forward to seeing how much more we could generate when other bidders got involved.

But then he made an even more deft move. He said: 'Mark, I really want this. Think of a number that's fair and if I say yes, we have a deal.' With this one phrase, he accomplished several important negotiating objectives: * By tempting me into a unilateral negotiation, he erased my right to shop the deal to other companies. He was shutting his out his competition.

* By forcing me to make the offer, he was increasing his chances that I would underprice the project. He worked in the apparel business every day. I didn't. He had an insider's knowledge of what constituted a fair price and what was a bargain. Plus, if I quoted an outrageously high price he could always say no.

* By grabbing the right to say 'yes' away from me, he had dramatically foreshortened the negotiation. It wouldn't drag on for weeks. It would be over the moment he said yes or no.

For my part, I had good reasons to let him get away with this gambit. I knew the client would consider $1.2 million extremely generous. Also, I couldn't be sure we could match it in an auction. Plus, I was being given carte blanche to name my price. I've always thought that being able to say 'you can have this for $X' is better than asking 'what will you give me for this?'. I gave up the right to say yes, but in exchange I got the right to name my price.

I gulped hard, tacked on an extra $50,000, and said: 'The price is US$1.25 million.' I could hear him sigh on the other end before he said: 'OK, we have a deal.' But the sigh was pure acting, because he knew better than I that he had pulled off a negotiating coup. When you shut out the competition and get the other side to make the first offer, you have every right to feel you're getting a bargain.