Articles on IT Acquisition and Doing Better Deals
Tips & Tactics
- Negotiations: Principled Concessions
- Financial Analysis — a Refresher
- Presenting vs. Positioning
- Even Pros Make Mistakes
- The Power of No
- The Dip
- Caveat Venditor
- Champagne and Scarcity
- Urgency—Guard it at All Costs
- They Know That You Know
- Why a Checklist
- Beyone the Handshake
- The Challenge with Buying Technology
- The “Try It, You’ll Like It” Ploy
- The “We Don’t Need To Write That Down, You Can Trust Me” Ploy
- The “Low Ball” and “When I Hit Your Hot Button, I Gotcha” Ploys
- The “Price Protection Contract” Ploy
- The “Form Contract” Ploy
- The “Solutions” Ploy
- The “We Can’t Do It For You Because We Would Be Setting A Precedent” Ploy
- The “Unfortunately, I’ll Have To Get Any Changes Approved By Corporate” Ploy
- The “Price Protection Contract” Ploy
- The “Tie-In” Ploy
- The “Fait Accompli” Ploy
- The “Price Increase is Coming” Ploy
- Table of contents
- “We Don’t Need To Write It Down. You Can Trust Me” And Other Grim Fairytales
- The Negotiations Agenda Part 1
- One Bite at a Time
- The Negotiations Agenda Part 2
- Don’t Let Vendors Hold You Hostage
- The Right Attitude
- Finding Responsibility
- A Fair Audit Clause
- Looking Beyond “Needs”
- Before Saying “I Do,” Think About Divorce
- A ‘Top-Down’ Look In Challenging Times
- Don’t Allow Vendor Disappearing Acts
- Vendor Short-listing: The Long and Short
- If a Vendor Offers the ‘Lunch’ Ploy, Don’t Bite
- Make Sure Consultants Will Keep Your Secrets
- Two Essential Parts for Service Contracts
- Keep Consultants Far From the Enemy
- Be Wary of Annual Revenue Commitment
- Leasing’s Different When It’s Laptops
- Two Truths Behind Securing Better Deals
- Not in the Contract, Not Part of the Deal
- Feeling Safe With IT Security
- Avoid Surprises in Subleasing Deals
- Insist on Language to Cover Billing
- Manage the Contract
- Clear Ordering Procedures
- Winning with Leases
- A Ploy that Didn’t Fly
The “Fait Accompli” Ploy by Joe Auer
Fait accompli is a French phrase that roughly translates as “the deed is done” or “the thing is accomplished.” In the context of negotiations, the term describes a negotiating strategy that involves a bold action designed to place one party in a superior bargaining position.
In IT negotiations, this technique is used by the vendor and by the customer. As we say with a smile in ICN’s Negotiations seminar, “If a vendor does it … it’s a ploy. If a customer does it … it’s a tactic.” In both situations, the person utilizing the strategy tells the other party (by words and/or actions) to “take it or leave it!” For example, the vendor’s marketing representative dramatically gives the customer the vendor’s standard form agreement and says, “This is the contract we use and we just don’t modify it. Even companies much larger than yours sign this form agreement.” Alternately, the vendor’s marketer says, “This is our absolute best price. If this won’t get the business, you have just lost one heck of an opportunity!”
On the other side, the customer may employ the technique by saying, “Look, we won’t do business unless you come in under $550,000. If you can’t break that, forget it.” In each situation, the implication is “do business on my final terms or we call off the negotiations.” In other words, “either we do business on these terms or we don’t do business at all!”
If this technique is employed carefully, it can be extremely effective. The strategy is particularly useful:
- To “overpower” a weaker opponent. In this use, the party with the bargaining advantage uses the strategy to intimidate a weaker party into promptly closing the transaction.
- To catch an ill-prepared party “off-guard.” Here, the party using the tactic effectively disarms a poorly prepared negotiator. The latter party signs because of fear that the deal will be lost, and is too poorly prepared to understand otherwise.
- To enhance a time-dependent or “sense of urgency” marketing ploy. Here too, the weaker party is afraid not to close – on the grounds that the offer may not be available for long.
In each situation, the tactic works because it says, “Now it is up to you. We’ve given our best offer. You can agree and save the deal; or you can balk and lose all the advantages you’ve negotiated up to this point.” The party hit with the strategy is faced with a number of fears – the fear of personal failure, concern about business or personal rejection, and fear of failing to meet the company’s needs by not completing the transaction.
The fait accompli strategy is often used as a one-shot or “killer” close technique; that is, when victory can be gained by making one (or one more) dramatic move. The tactic also can be used before the closing to force the opponent into some action or reaction. In this mode, the strategy is effective to break open negotiations that are wandering or those that have dragged to a virtual standstill. In these situations, any action may be better than no action at all. Finally, the fait accompli technique can be used to force a deadlock or a break-off in negotiations. In this use, a negotiator deliberately polarizes the discussions either by offering an ultimatum or final offer that obviously will not be accepted or by countering the other party’s fait accompli move with one of his/her own. However, there are risks.
The basic problem in using this strategy is what to do if it fails. The strategy is primarily effective because of its “poker game bluff” impact. However, sometimes the other side refuses to buy the bluff and calls instead. Because of this risk, a negotiator who uses this technique must always have a fall-back position – and a route to get there without losing face.
Saving face is important from a psychological standpoint (Maslow’s needs), but it is also vital if the negotiator is to retain negotiating credibility. Retaining credibility (and maintaining an effective “bluff” capability) is particularly critical if the negotiator will face the same opponent again in the future (as is often the case with an incumbent vendor).
The fait accompli tactic can also break or deadlock negotiations. Both of these results can be effective negotiating tactics in themselves but, like anger in negotiations, they must be used carefully and purposefully by a trained negotiator capable of anticipating and manipulating the resulting reaction. Because the fait accompli technique effectively says “take it or leave it,” a deadlock often results when both sides use the strategy simultaneously. When this occurs, breaking the deadlock requires some care, particularly where face-saving may be – or become – a paramount factor.
As in most negotiating situations, the first step in countering the fait accompli technique is to recognize it. Once the strategy is recognized, several reactions can defuse its effectiveness.
First, ignore it. To be successful, the fait accompli technique must be dramatic and force the other side into action (usually hasty or ill-considered action). In the right circumstances, one of the most devastating counter moves is to ignore the strategy completely. Do not panic. Do not react. Rather, pretend that you did not hear the implicit ultimatum “take it or leave it.” In some situations, this can be done with humor – in effect treating the ultimatum as if the negotiator can’t possibly be serious.
Second, be quiet. Again, do not react, do not panic, above all, do not appear threatened. Instead, simply stop talking and wait for the other side to react. Sometimes the reaction will be a smile and some words that indicate the negotiator “wasn’t really serious.” (In effect, the silence calls the bluff of the bluff-caller.) In other situations, the party using the strategy may pack up and leave. When this happens, one of the other counters mentioned below must be used.
Third, side-step the ultimatum. Often, the best way of side-stepping the fait accomplitactic is to ask the party using the strategy to restructure or redesign the deal to avoid the apparent deadlock. In this situation, the potential victim of the strategy responds by saying, “Alright, that’s your final position on that proposal. Since we apparently cannot do business on that basis, maybe we can salvage the deal (and your commission) by considering an alternative proposal. Perhaps we could purchase the peripherals and do an extended lease on the CPU. Or, do we really need the new series of peripherals right now for this application? We could really get back to our cost figures if we …” The key to this counter-strategy is that it permits the negotiator that employed the bluff to save face. The original “take it or leave it” threat can be left on the table. Instead, an alternative proposal that will meet the same needs can be considered.
Fourth, be honest. React to the fait accompli strategy by saying, “Come on, John, you don’t really mean that. We’ve spent days on this project and neither one of us seriously wants to blow the deal now. Let’s take a break (for lunch, coffee, or errands) and start again in a few minutes. Maybe we haven’t really considered each other’s position …” This technique can be risky in that the party employing the tactic may be unwilling to admit he/she was not serious in making the “take it or leave it” demand. However, the honesty counter can defuse the fait accompli tactic in a number of circumstances, particularly where the two negotiators have met before and have a degree of understanding and respect for each other. Even where this counter fails (and the other negotiator replies, “Like hell, I’m just as serious as I can be”) the status of the negotiations is no worse than when the tactic was initially deployed. If the counter does fail, panic and overreaction must again be avoided and an alternative counter measure must be utilized.
Finally, penalize the perpetrator. In effect, reverse the pitch and purposely break off or deadlock the negotiations. For example, if the fait accompli tactic revolves around signing the vendor’s form agreement, the customer may respond by saying, “Fine, I guess that settles that. I don’t care what larger companies do, we’ve never signed a form agreement and we’re not about to start now. Actually, maybe the larger companies can better afford the risk of signing someone else’s form agreement. It’s too bad, we really like your system.”
Because both sides generally want to continue to try to do business, this strategy is almost always temporary in nature. Sooner or later (usually sooner in the case of the vendor), the other side will be back. Temporarily breaking off negotiations can be particularly helpful where the customer may be on the verge of falling for a fait accompli move by the vendor. If panic or a falsely-induced sense of urgency is beginning to set in (at any customer level, whether senior management, IT manager, attorney, or financial officer), the best step may be to call a forced “cooling off” period. When negotiations are temporarily broken off or deadlocked, the customer can utilize the ensuing time to regroup and rethink its negotiating plan and design an appropriate counter-strategy. Often the vendor will break this deadlock first by backing off from thefait accompli ultimatum or by side-stepping and structuring a new proposal designed to meet the same customer goals. If the customer believes that it must make the first move, the customer can also employ the side-stepping technique to get the negotiations moving again.