Is Deferring a Payment Always a Good Strategy to Maintain Leverage? Or Does It Signal Distrust in an Otherwise Good Relationship
I am planning to renew my services with my vocal/pronunciation coach for another year.
I'm happy with the negotiation outcome.
My current service with him ends in 3 months.
The relationship has been really good so far.
As such, I'm wondering if it's a good idea to make the payment now or delay it to 3 months later.
He even initiated to give me the choice himself:
Vocal Coach: That's great news.
So happy to continue working with you!
Would you like to get the payment out of the way now/soon?If so, I can send you an invoice shortly.
Or would you prefer to wait until we are closer to the end of your first year (January)
Advantages of Renewing Now
- It signals and builds trust
- I get this out of the way and don't need to worry about another task at the end of the year
- The amount is very reasonable so I can lock in the agreement in case he decides to charge higher in 3 months.
However, the likelihood that he will charge higher then is small. - He does have a passion for vocal coaching so the teaching quality will be maintained regardless of when the payment is made
Advantages of Renewing Later in 3 Months
- I may change my mind in a few months on whether to continue with his service
Though my plan is to continue training for another year - He has more incentive to provide a good service for the last 3 months to make sure I go ahead with another year
- A small advantage of having more funds to invest although it's insignificant
How I Would Tell Him to Defer Payment?
Me: I like to reflect upon the year and make plans for the next in December.
I would prefer to make the payment then if that's okay for you.
So it doesn't come across as I don't trust him, but it becomes a matter of personal preferences and planning.
The thing is that he has been delivering good service, and I trust him.
So I don't think that I will be shortchanged for the next 3 months by making the payment for the service now.
Thoughts on When to Defer Payment in General
One should defer payment when there's
- Less trust and lack of working relationship
- The payment concerns a large amount so you have much to lose by making the payment now
- The person seems primarily motivated by money rather than by passion in offering the service
- The delivery of value is uncertain like in sales, marketing, etc
- When you likely need to ask for a favour in the future
On average, usually better paying either after the service, for milestones, half before - half after, or for smaller time periods.
I personally wouldn't pay for coaching a whole year advance.
One because you take over the risks.
And two, because the more in the past your giving was, the less power it carries -even at a purely emotional level-.
You pay in January, he feels good to give back for the whole of January. But August comes around, and the payment is so far back that some people might start feeling like they're doing you a favor.
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On distrust, yes, depending on the people and situation, the request in itself might remove some goodwill and social capital, plus move the relationship more towards the business/colder end of the spectrum (which is not always and necessarily bad).
So better doing it tactfully.
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Thanks a lot for the advice!
It sounds like an interesting concept if it is not already mentioned.
That social capital depreciates over time.
If I save someone's life, it could mean virtually nothing in 10 years.
Quote from Matthew Whitewood on October 13, 2021, 7:42 pmThanks a lot for the advice!
It sounds like an interesting concept if it is not already mentioned.
That social capital depreciates over time.
Not directly maybe.
The "hyperbolic discounting" touches on similar properties, but maybe it's worth it to make it clearer.
I added a few more rules to the "advanced rules" section of "social exchange dynamics" now to better clarify it.
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I followed your advice to defer the payment.
My vocal coach decided to play an artificial deadline power move:
Me: I prefer to leave this till we are closer to the end of the year if that's okay for you
Vocal Coach: No problem, the deadline to extend will be one month before, 16th December
It's artificial because it's not like we would decline me as a client after 16th December.
As such, it's fake negotiation leverage.
I think ignoring this statement is best because highlighting this may encourage him to find reasons to legitimise his"fake leverage" to
- save face or
- maintain his negotiation position.
My strategy is to continue the coaching service and pretend that he never mentioned the artificial deadline.
Interesting, thank you for sharing this update Matthew.
Yes it definitely does sound like an artificial deadline and a power move.
If you like his work and if you found benefit in it, then ignoring it is a good approach.
Otherwise, you can highlight you got the game and don't particularly appreciate it with a joke:
You: LOL, ok, let's hope that by the 16th I will remember or I'm screwed: I do want to keep working with you 🙂
Notice what this does.
It... I won't say it, if anyone wants to analyze that and why it can be a good approach, go ahead.
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Let me guess since this concerns my personal interest :).
Otherwise, you can highlight you got the game and don't particularly appreciate it with a joke:
You: LOL, ok, let's hope that by the 16th I will remember or I'm screwed: I do want to keep working with you 🙂
Notice what this does.
This helps to
- Show that I don't really care and have the power to forget.
This highlights the leverage on my side, the cash that I have to offer. - The joking tone with the collaborative frame removes the edge.
Also, it saysLet's not play these games, shall we?
Let's work together peacefully and happily.
Somehow sarcastic humour can be a useful tool to highlight manipulation.
In this case, it says what I will do on my side.
I don't accuse him directly.
Also, I realised people can be generally friendly and collaborative.
But suddenly, there's a conflict of interest, and they show their more manipulative side.
Sometimes I get fooled by the track record of collaboration.
You got most of it.
Adding and expanding the analysis, those short lines say:
- "I got your measure": the "lol, let's hope" sub-communicates "I saw your power move"
- ... In a smooth way: it's friendly and low-power enough that it saves his face and power, and avoid escalations
It's a good middle ground between escalating / going assertive and totally pretending it didn't happen (just to make sure he doesn't think you're easy to manipulate).
- "I got leverage":
"I'm screwed" is a "joke by exaggeration" that shows the opposite.
You're not screwed in reality, so you sub-communicate: "I'll be fine either way, you need me as much as I need you"
- Collaborative eagle style: "I do want to keep working with you" is just plain honest, high-power vulnerability as it shows your cards without hiding.
- Eagle-style leading: it's a hard break from what's happened so far and opens a new mode of honest, value-adding communication
It sub-communicates "let's not play games here I like you, and I'm taking the first step towards honest and value-adding communication. Join me in this superior mode and we're both better off".
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Lucio: Yes it definitely does sound like an artificial deadline and a power move.
I'm thinking if it's a good negotiation strategy to pretend to be naive at the start to draw more information from him.
I was surprised that he made this statement.
From this, I started to think that he has fewer clients than I originally thought.
If people think you're power-aware, they may be more careful to reveal information during a negotiation.
Maybe this is a second-order effect from the other negotiation principles like anchoring.
And preventing the negotiation power moves may benefit more than the information they reveal.