Splitting The Difference And Other Crazy Ideas

Well, I guess I should say, don’t offer to split the difference. There can be very good reasons to accept someone else’s offer to split the difference, but there’s never a good reason to offer to split the difference. ​

Let’s say for example you’re purchasing software licenses (originally offered at $70 per user and you originally countered with $40) and you’ve gone through a few rounds of negotiation and you’ve gotten the salesperson to where they’ve offered $55 per user and you’re up to $45 per user. If you offered to split the difference, you’ve made a $5 concession if they accept and potentially you could be trapped into making a much larger concession if they come back for more (I’ll get to this). So, in order to avoid falling prey to the trap of offering to split the difference, you ask them to offer one.

“But Mark, that doesn’t make any sense, isn’t that the same thing?”

No, it’s not. Stay with me, the wording here is key!

So let’s say we’re at a point where the salesperson has offered $55 per user and is getting pretty sticky at this price, to the point where you don’t think you’re going to get them to move much more and you’ve moved up to $45. At this point in the negotiation, it’s likely that the salesperson may be experiencing some deal fatigue. They likely want this deal to be over so they can close the sale and move onto the next one. In order to get them to make that $5 or more concession you need to employ 3 tactics.

  • Use emotion to pull them to split the difference – Your wording should go something like this, “Boy, it seems a pity, we’re only $10 away from making a deal. Especially after we’ve spent so much time working on this deal. It seems such a shame for us both to walk away at this point.” The key here is to keep pressing on the amount of time and effort you’ve both put into getting this deal so close to completed. “Gosh, if only we had a way to make this work. You’ve put in so much time here too. It seems such a shame for us both to lose out like this.” By using this type of wording you’re building up an emotional attachment to the sale for the seller and you’re trying to pull out an emotional response as a result of that attachment. That emotional response is usually the offer to split the difference. By getting them to offer to split the difference you just earned a $5 concession as opposed to conceding you own $5. But wait, there’s more.
  • Thank and bank – DON’T REJECT THE OFFER! You just earned a $5 concession. Time to thank and bank. Your wording would go something like this, “Wow, that is generous. Thank you so much for that offer and Ill definitely accept it and I would ask that you give me a day to get feedback from my purchasing committee (who makes the ultimate decision) on whether this will meet their needs. I’ll try my best to get this approved and I’ll get back to you.”
  • Ask for more – Make them wait at least 1 day but no more than 2. At this point you’ve gone to your purchasing committee and they’ve decided that you should go ask for more. You can now employ a modified good guy/bad guy routine and ask for more. Your wording to the salesperson would go something like this, “Well, I’m embarrassed. I thought for sure the purchasing committee would approve this and we debated about it for some time. They’re very grateful for the $50 offer and they’ll accept and they’re asking for a better offer.” The salesperson will be disappointed. And it’s important to amp up the empathy here and use that emotion of disappointment to your advantage. Your follow up wording here should go something like this, “Look, I can see you’re disappointed. I tried my best and I’m sorry. It seems such a pity for us to be only $5 apart and for us to walk away having worked so hard to get here.” (you can use a lot of the same wording here with different variations as you did in point 1 to draw them to make another emotional response). It’s likely that they will offer to split the difference again. Think about that. If they offer to split the difference again, you’ve earned 75% of the $10 delta between the original offer and ask. Now, you’ll say, “Look, I’ll take this back to my purchasing committee and get their feedback. I really appreciate it and I’m confident that this time they’ll accept it.” You can rinse and repeat this routine as much as you want till you get them to the point of saying enough is enough. I personally have never got past 3 cycles.

“But wouldn’t it be more fair to split the difference right at the beginning when you had the $70 offer and the $40 ask? Isn’t what you’re proposing unfair to the salesperson?”

Good question. Like compromise, splitting the difference on the original offer sounds fair, but it tends not to be. You see, it all depends on whether what you’re offering or asking for is fair to begin with before you can determine whether splitting the difference is fair. What do I mean by this? Well, just by way of example, let’s just say, that the salesperson sells licenses at $70 per user and you make me an offer at $40 per user. Splitting the difference at $55 a user sounds fair, right? It sounds fair because it’s equal. What if I told you that the software was only valued at $45 per user when compared to the market? Is it still fair? Or have you grossly overpaid? So you see, unless you have really good market intel to support whether something is fair or not, it’s pretty difficult to determine whether splitting the difference at the original offer is fair. And, don’t you want to get better pricing than the market?

Folks, using this technique to draw an emotional response to split the difference takes practice and building up emotional attachment to the offer here to get an emotional response is KEY. Without building up that emotional attachment, you’re not likely to get any concessions. Using emotion to build attachment and draw an emotional response is the only way that this works well. Never offer to split the difference, because you’re likely getting drawn into the same routine. The goal is to get them to offer to split the difference.

And remember, practice, practice, practice.