Negotiation & LIM's Rule...

I met Lim several years ago when I was stranded at Stockholm Airport in Sweden for several hours due to a very heavy snowstorm.

Lim was a Korean businessman. We were seated next to each other in the waiting lounge and got chatting about business, and the conversation got onto talking about negotiating and the different strategies used by people in different countries.

His number one strategy which I later named LIM’s rule, was this:

Before going into any negotiation, you should have 3 prices clearly fixed in your mind:

L. The price you’d LOVE to get.

I. The price you INTEND to get.

M. The price you MUST get, or you walk away.

?And I shared my number one negotiating strategy with Lim:

Many executives and trainers in negotiation believe that it is better not to make the first offer. I do not agree.

If you make your highest possible offer first, you set the tone for the price negotiation. You set a benchmark in your prospect's mind and unconsciously or consciously, they are going to seek to establish how the value of your proposal compares to that price point.

I've always found in all my negotiations that in most cases, the higher my initial offer, the higher will be the final figure agreed on.

So, from now on - always make the first offer, and the one you'd LOVE to get, BUT...

Do not accept their first offer or counteroffer immediately. Even if it's a really great offer and you would love to accept it - do not.

In the first place, if you do accept it immediately, it will reduce the value of the deal in their minds. They will be concerned they could have done better and may even go back on it, either immediately or soon after.

Secondly, if it's their first counteroffer, you can almost certainly do better.

If it really is so good and you do want to accept it, pause and make out you are considering it very carefully.

Then after a little while, almost reluctantly, agree, but of course ask for concessions.

?I hope you found that helpful.