Signaling

Signaling is a very important part of any negotiation. Signaling is how you convey messages without acknowledging that you are sending those messages. Let’s say that you are in sales and your product is offered at $1,026 each, although if you had to to close a sale, you could go as low as $910.

The buyer says to you, “I need you to do better, do you have any flexibility?” What do you do now? If you say, “Yes, sure I do,” you may have opened the door far wider than you want to.

On the other hand, if you say, “No, never, absolutely not, don’t even think about it,” your acting skills may be so good that you will have convinced the buyer that you aren’t going to negotiate price at all.

That’s fine if the buyer’s is willing to pay $1,026. But what happens if the buyer is only willing to go up to $990? This would still be a good sale for you, since you could go as low as $910.

So you need a way to respond that signals that there might be some flexibility, but you didn’t say there was, but there could be, but you didn’t promise anything, and we’ll see. That’s what signaling is all about.  (Continued on page 39)