Persistence

Seeing a deal through to its conclusion often requires persistence, especially as delays, obstacles, and disagreements extend the length of a negotiation to days, weeks, months, or even years.

We can separate delays into two types: understandable delays, that have valid reasons that are totally justifiable; and inexcusable delays, which have no justification whatsoever and serve no other purpose but to waste time.

We can also separate obstacles into two types: surmountable obstacles, which can be overcome given enough time and creative problem solving; and insurmountable obstacles, which are impossible to overcome due to there being intractable problems that cannot be solved.

We can separate disagreements into reconcilable disagreements, where given enough patience and persuasion an agreement can be reached; and irreconcilable disagreements, whereby there is no conceivable way that either party could ever reach an agreement under any circumstances.

The key to persistence is holding the belief that there is no such thing as an inexcusable delay, as every delay is understandable; there is no such thing as an insurmountable obstacle, as every obstacle can be overcome; and that there is no such thing as an irreconcilable disagreement, as every disagreement can eventually be resolved.

In practice, persistence is never allowing yourself to get frustrated, always looking for a productive path forward, and patiently and methodically working towards reaching an agreement.

If someone cancels a meeting, simply schedule a new meeting; if someone does not reply to an email, send a follow-up email; if someone says they are not interested, try to make your offer more interesting; if someone says something can't be done, propose ways in which it can be done; if someone says they can't do a deal right now, check back with them later.

Being persistent means we don't give up, and we keep going until a deal is reached. In our minds, there is no time limit, and we will keep the negotiation going as long as necessary to close a deal.

Imagine you worked in commercial real estate, and were looking to purchase a gas station so that it could be converted into an electric vehicle charging station. After doing some research, you find a gas station at a perfect location, and decide to approach the owner to make an offer to buy it. You give the station's number a call and ask to speak to the owner, and once they're on the line, you say, "Hello, I'd like to make an offer to buy your gas station," at which point the owner says, "Not interested," and hangs up the phone.

Now, you have just been hung up on by the gas station owner after having been told explicitly that they were not interested in selling. The question is, should you give up, or should you persist?

Let's say you decide to keep going, and you drive to the station, walk in, and ask to speak to the owner. A large scary-looking man glares at you, tells you they're the owner, asks what you want, and you say, "Hello, we spoke on the phone earlier. I was wondering if you'd be interested in selling your gas station." The scary man says, "I told you no on the phone," to which you reply, "Yes, but I never got a chance to ask why?" The man replies, "Because it is not for sale," to which you reply, "That's not a problem - I would still be willing to buy it. Did you have a price in mind?" To which the owner says, "I said it isn't for sale, so if that's all you're here to do, you're wasting your time." At this point, you say, "Well, since I'm here, I think I'll get a coffee." You get your coffee, pay for it, wish the owner a nice day, and are on your way.

The next day, you come back, and the owner says, "I told you I'm not interested," to which you say, "I'm just here for the coffee." The owner says, "No you are not - the coffee here is awful." To which you reply, "It's not that bad at all," and you pay for it, bid the owner a nice day, and are on your way.

For the next several months, you stop by every morning, buy a cup of coffee, wish the owner a good day, and are on your way.

One day, the owner stops you and says, "Hey, are you still interested in buying this place?" To which you reply, "It depends, is it for sale?" The owner says, "Well, that depends on how much you'd be willing to offer." To which you say, "Based on what other stations have sold for in the area, I'd be happy to take it off your hands for $750,000," to which the owner says, "That's not nearly enough," at which point you say, "What would be enough?" The owner says, "$2 million," to which you say, "Oooo, that's more than I have unfortunately, that's too bad, I really like this location." At which point, you pay for your coffee, bid the owner a nice day, and are on your way.

A few more months pass, with you buying coffee every morning, until the owner says, "What if I came down off the price to $1.5 million," at which point you say, "The price of similar properties is still $750,000, but I would be willing to come up to $850,000," the owner shakes their head, and you get your coffee, pay for it, wish the owner a nice day, and are on your way.

Several months later, the owner says, "OK, what if I came down to $1 million," to which you say, "I can come up to 900 - that's $150,000 over fair market value - and I can cut you a check right now." You take out your checkbook and pen, and after a brief staredown, the owner agrees, and the property is yours after nearly a year of buying what was in fact awful coffee.

Persistence in negotiation requires that we not give up, not get frustrated, and keep working towards making a deal. Delays, obstacles, and disagreements are often a necessary part of the negotiating process, but provided we are patient and are given enough time, we can still walk away with the deal we want.