Negotiations: How to handle an ultimatum

Question:

What are some strategies for responding to the ultimatum, “take it or leave it”?

Response: 

An ultimatum is a ploy to take control over the negotiation and attempt to force you to accept unreasonable terms or conditions. The two most common strategies include: 1. A deadline issued to force you to accept an unreasonable offer. 2. An assertion that the offer is on a “take it or leave it” basis. 

The objective of an ultimatum is to create a sense of panic which causes the other party to accept an outlandish offer. Seasoned buyers who want to “break in” unsuspecting or inexperienced sales people will use an ultimatum to “teach them a thing or two.” Often their strategy is to wait until the deal is just about to close and then, without warning say, ‘Here’s my offer … you have until tomorrow, take it or leave it.” With an inadequate number of prospects in the pipeline, the sales person fears the loss of the sale and grudgingly, accepts the terms.

The result is of course, disastrous! The sales person has not only compromised his company’s profitability, but he has set a horrific precedent with his new customer. Adding to this pain is the cycle of self-criticism that will gnaw at the core of the sales person for a long time.

So what are some strategies for responding to an ultimatum?

You could …

Ignore it

If you ignore the ultimatum, the other party will either not respond, or will feel insulted, which could intensify his or her threats. If this happens, the risk is that he shifts his focus from being about the issue to it becoming personal. If this happens, the fight is likely to become more hostile.

Respond with your own ultimatum

When you receive an ultimatum and the other party says to you, “Here are the terms … take it or leave it,” you could respond with your own ultimatum by saying, “If you do this, we will do this. Take it or leave it.” 

When you counter an ultimatum with an ultimatum, you are saying, “I won’t be intimidated. I’m prepared to fight.” This means that you must be prepared to walk away and let the negotiation fail. Used in the right situation, this approach could be viewed as humorous and trigger a shift between the two parties so a mutually agreeable solution could be explored.

Likewise, when initiated from a place of ego, hurt and angry feelings prevail which can sometimes result in a desire for retaliation. 

Acknowledge the ultimatum and agree to it

When you concede to an ultimatum that benefits the other party, you simultaneously surrender your power and authority. The other party becomes The Alpha. Never allow this to happen. Walk away and let the negotiation fail. Never allow a situation or person to degrade you.

Recognize the ultimatum and counter with a reasonable offer

When someone says, “take it or leave it,” they are in essence telling you that they want the discussion to end. If you refuse to play into their hand, they will dismiss you to pursue other options. And that’s where their leverage comes from, they have other options. 

In the rare case when they don’t have an alternate option, your offer may open the door to the possibility that differences can be reconciled.

To get what you want in a negotiation, NEVER let the other party know that you are desperate, scared or insecure. People want to do business with people who are successful and confident. That means that you don’t give them everything they want. This might sound crazy, but it’s true.

When I worked for Slim-Fast Foods, I was assigned the New York territory. It was there that I learned that, “Every conversation is a negotiation.” Customers didn’t always want what they asked for. Rather, their request was a ploy designed to test my fortitude, boundaries and resiliency. They wanted to know if I would cave in under pressure. It’s part of the Darwinian theory – only the fittest survive. 

If you want your customers to respect you, don’t give them everything they want; instead give them what they deserve. If someone serves you an ultimatum, consider your options carefully. The strategy you select should preserve your self-esteem even if that means you walk-away from the negotiation and let it fail. That in effect, could be the most powerful response of all.

 

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