Become A Master Negotiator

Summary: Being the first to put forth an offer in a negotiation.

Some negotiators believe you should never make the first offer. We have watched negotiations stall because neither counterpart was willing to make the initial move. We believe that if you have conducted thorough research, planned well, set high aspirations, and made a commitment to a win-win outcome, you should have no fears about Making the First Offer. The only time we would discourage you from doing so is when you have no interest in what is being negotiated.

Example

Two couples are out for dinner one evening. John and Mary announce that they are planning to sell their home. Mark and Elizabeth state, “We want to buy your home. What is your price?” John and Mary respond, “Based on a competitive market analysis completed by two different real estate brokers, we feel a fair price is $450,000.” John and Mary have done their homework and have high aspirations, so there is no reason for them to hesitate to make the first offer.

Counter

There are several effective counters for this example. One possible counter is the tactic YIKES! You’ve Got to Be Kidding! This would be especially appropriate if Mark and Elizabeth’s banker has told them that the maximum loan they could qualify for is $425,000. A second effective counter would be for Mark and Elizabeth to conduct their own competitive market analysis and counter with a lower price, using the tactic of Facts and Statistics. If they are not clear about how the price was determined, a third counter could be the tactic of Asking an Open-Ended Question: “Just so we understand, what comparable neighborhood and homes did the real estate brokers use in their competitive market analysis?”

Have you used or encountered this tactic in your negotiations? If so, how’d it go?

Summary: Encouraging any partner interested in buying out another partner’s interest to make a fair and reasonable offer.

Example

Two business partners enter a buy-sell agreement that Establishes a Fair Starting Point in case either partner wants to buy the other partner out in the future. They make the following agreement: If Partner A wants to buy out Partner B, Partner A will make an offer that he considers fair and acceptable. B is then given a choice. She can accept A’s offer, or reverse the offer and buy out A under the same terms. This system of Establishing a Fair Starting Point encourages any partner interested in buying out another partner’s interest to make a fair and reasonable offer.

Counter

This is a difficult tactic to counter because both parties agree to the fair starting point before the tactic is ever utilized. If the situation has changed since the start of the negotiaiton, such as the business has doubled since the Fair Starting Point was established, the best tactic to counter with would be Facts and Statistics.

Have you used or encountered this tactic in your negotiations? If so, how’d it go?

Summary: Appearing indifferent to the outcome of a negotiation.

With this tactic, one counterpart appears to be uninterested in the outcome of the negotiation. She simply encourages the other counterpart to follow through with the terms. Her attitude is clearly, “Whatever…”

Example

Company A warns Company B that if a delinquent bill is not paid, the matter will be turned over to a collection agency. B replies, “We are already being sued by six other companies. We are planning to file for bankruptcy next week. We will provide you with the name of our bankruptcy attorney, and you can send the collection paperwork directly to him. Perhaps that will save you some time.”

A second example is a parent giving a teenager some tough feedback about a bad report card. The parent says, “If you don’t improve your grades, you will be grounded indefinitely.” The teenager replies, “Whatever, I don’t care. I don’t have any friends or anyplace I want to go anyway.”

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Summary: Putting off the decision to have more time for consideration.

One of the tactics that can keep the door open in a negotiation is: “I’ll Think About It and Get Back to You Later.”

Example

A man is interested in a buying dining room set from his neighbor. The seller says her price is $1,500. The buyer responds, “I’ll Think About It and Get Back to You Later.”

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