Negotiating in Life, Negotiating Tips, Negotiation Strategies July 21, 2009

The Krunch Negotiating Tactic

You’ve got to do better than that!

It is perhaps one of the oldest negotiation tactics in the world. Most everybody uses it at one time or another, from our everyday interaction at a store to the most high-level negotiation. At Karrass we call it the “krunch” tactic, and we think it works well, although we advise buyers not to overuse this technique.

How the “krunch” tactic works is simple: you put the burden on the other party to change the price in order to get your business. We state: you’ve got to do better than that (with the subtext “if you want to do business with me”).

There are several reasons this tactic works on sellers, and most of them are psychological. The salesperson probably thinks one or more of the following:

The buyer must have a lower price

The buyer wants to do business with me

The buyer must know something I don’t

The buyer is giving me another chance

There is also a systemic reason the “krunch” works well in negotiations: companies generally build in some wiggle room on their pricing. In fact, when buyers overuse the tactic, sellers will start building a ten percent addition to the price, which they can later remove in order to get the business.

Salespeople do not have to fall for the “krunch” negotiation tactic. They should first ask what the problem is: are other sellers offering the same product and the same service at a better price? Salespeople (and buyers) should recognize that there is more to price than just dollars. A price involves service, quality, delivery, reliability and other “soft” factors.

As Dr. Chester Karrass points out in his book Give and Take: “Handled right, it is possible to make an opportunity out of a krunch. A salesperson should not go into a negotiation without asking himself or herself, ‘What will I do if the buyer says ‘You’ve got to better than that?’’.”

Have you used the “krunch” tactic successfully? Have you refused the “krunch” tactic successfully? Let us know your experiences.