In order to get the best possible deal, you need to be willing to take some reasonable, judicious risks during the negotiation.  One obstacle to making better deals may be your own reaction to risk taking and the tension that risk taking creates. As we said in the course, in order for us to make that better deal we're going to have to take some reasonable risks.

Imagine that you've done a good job selling your customer, that he likes you, likes your product and services, and that you've put together a package that really meets his needs. So far, so good. But now, in addition, he wants you to reduce the price. What do you do? Do you say yes and make the sale at a lower price, or do you say no, and maybe risk losing that sale.

Every time we say no to a customer we risk losing a sale. We'd rather say yes. But if we always say yes when the customer wants a lower price or more services and product for the same price, we make lots of sales but they're not very profitable sales. If you always go down to your LAS whenever you find yourself in a price negotiation, the overall profitability on your sales will be much too low. Of course, on the other side of the coin, if you take too many risks, are too inflexible, and hold out too much, then you're going to lose too many sales.

The key is to find a good balance. Making better deals means taking just enough risk so that you can increase the profitability of all of your sales and lose very few in the negotiating process.

One of the reasons that we frequently are not inclined to take risk is because it creates anxiety and tension. As we discussed in class, there are two types of tension. You recall that Mustaffa felt Tension Type I when the tourist's offer was below his LAS. Because the tourist wasn't even offering a price that was within his settlement range, he wasn't sure whether he could make the sale at all, and this made him tense. When the tourist finally increased the offer so that it fell with Mustaffa's settlement range, Mustaffa now had to decide whether he should make the sale or hold out for an even better deal. If he decided to hold out for a better deal, he risked losing the sale he could now make. Thus Mustaffa was faced with Tension Type II.