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INVESTMENT GROUP TO SEATTLE: “IF-YOU…”

“An investment group that’s been fighting to build a Sonics Arena in Seattle announced on Tuesday that it was no longer seeking public funding.

The new arena would be built in Seattle’s stadium district, according to statement on the Sonics Arena website. As part of the proposed deal, the group offered to help fund some of the city’s other infrastructure projects.

(The) offer of private money does come with some stipulations, including receiving a waiver of the city’s admissions tax. The tax is typically paid by people attending an event. It’s added to the price of the ticket or entrance fee. The group also wants to pay lower taxes on revenue made outside of Seattle.”

Read the full article from CNN.

Since 2008, when the Sonics left the city, Seattle has been without an NBA team. Numerous attempts have been made to bring one back to the Emerald City, but have, thus far, all been rejected.

Now, a new investment group is trying a new tactic to break the stalemate. Investors Chris Hansen and two of the Nordstrom brothers have proposed a “Trial Balloon,” basically, an “If-You” scenario.

This simple, yet often underused, tactic is basically saying that “if you do this for me, I’ll do that for you” (or the other way around). The reason a lot of negotiators are reluctant to employ this particular tactic is because when a lot of people make a concession, they feel it has to be from the “goodness of their heart.” But using it offers some solid advantages.

First, it’s a way to break a deadlock. Often, when two parties are at an impasse, they’re both in sort of a weird situation. Both may very well want the negotiation to continue, but they feel they have to take a hard line due to organizational or personal pressures. The “If-You” offers a face-saving way to back away from that firm position without the seeming loss of face (or power).

Also, it’s a powerful way to increase satisfaction in a negotiation, especially in the area of concessions. Our position is that you, as a negotiator, should always consider the concept of the “If-You” when giving something away – in other words, asking for something back for that concession. “You want a lower price? I can do that if you pay me sooner.” “I can give you expedited shipping if you increase the order size.” Fundamentally, concessions that are just given away for nothing are often discounted by the other side. It’s not unlike giving your kids an allowance. Most parents use this tactic by assigning chores in order to get the allowance. It’s not done primarily to get the work done (although that’s certainly part of it), but rather, to teach the value of money. Without the If-You attached, then concessions (especially recurring ones, like an allowance) become entitlements – “Dad, where’s MY allowance?”

Another reason why you should always consider this tactic is that it’s an excellent way of gathering information. In other words, it helps you discover what they need, as opposed to what they say they need at the beginning of the negotiation. For example, if a buyer is asking for a 2% discount, a possible response might be, “Okay, I can do that, but instead of the standard two-week delivery, I’ll need up to four weeks to get it to you.” And if the other side responds with, “Oh, no… I need it in two weeks!” – what have they just told you? That they’re most likely under a two-week time crunch.

One way of making a concession without raising the other side’s Expectation Index is to use an If-You and tie a string to the concession, and then let them unravel the string. In other words, after they go through all the reasons why they need it in two weeks, it gives you the opportunity to say, “Let me see what I can do.” You can then come back sometime later and say, “Listen, I was able to get that two-week delivery time for you, AND I’ll give you the 2% discount.” Will they look at that concession a little differently than if you’d just given it right away? Plus, it adds credibility to your opening price, and may slow down the demand for future concessions.

A final thought – make a list in advance of things you might ask for when you make concessions. If you don’t, odds are you won’t be able to think of some in the heat of the moment.

Want to learn more about negotiation tactics? Download our Guide to 10 Popular Negotiation Tactics Buyers and Sellers Use to Gain Leverage.

Tagged With: negotiation in the newstrial balloon