Become A Master Negotiator

Summary: Walking away from an unacceptable deal.

In any relationship, the side with the least commitment to continuing the relationship has the most power. Being able to walk away from the bargaining table when the tide turns against you gives you leverage.

Example

Kathleen wants to buy a daybed for her daughter. The bed has been advertised for $177. When Kathleen starts to pay for the bed, the salesman tells her there is an additional $25 delivery fee. Kathleen doesn’t want to pay the fee, since her husband can pick up the bed in his company truck. The salesman agrees to waive the delivery charge.

A week later when Kathleen and her husband go to pick up the bed, the clerk behind the counter states that the person Kathleen talked to previously did not have the authority to remove the delivery charge. After going back and forth, Kathleen finally says, “Just give me my $177 back and we’ll buy the bed somewhere else.”

Counter

If someone uses These Boots Are Made for Walking on you and you can meet your goals without that person (e.g., other people are interested in your product or service), let your counterpart walk. In the example above, the clerk apparently thinks the store can sell the bed to someone else for the full price plus delivery charge, so he is not concerned that Kathleen is walking away. If he decides that waiving the $25 charge is a small concession to make, he may utilize the tactic of Losing the Battle to Win the War. But if the clerk ends up chasing after Kathleen and bringing her back to the bargaining table, his power will deteriorate considerably. Car salespeople are notorious for going after customers when they start to walk away. Remember, if you keep walking, the leverage will be on your side, as long as you have a way of contacting your counterpart again should you desire.

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

Summary: Using empathy to show understanding for a counterpart’s concerns and to explain one’s own point of view.

Feel, Felt, Found is effective for helping your counterpart understand your point of view.

Example

The buyer states, “I can’t believe you’re asking $30,000 for this software package.” The seller responds, “I can understand how you feel about the price. Many other owners have felt the same way until they found out how customizable and trouble-free our software is. There really is a difference, and that is what makes this price such a great value.”

Counter

The buyer could respond with the tactic of That’s Not Good Enough, insisting that $30,000 is simply too much, then pausing and waiting for the seller’s response. Or, the buyer could appeal to a Higher Authority, explaining that his wife or business partner will let him spend only $28,000. Finally, he could use the tactic of the Trade-Off Concession and agree to pay the $30,000 if the seller will throw in service and support for one year.

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

Summary: Putting the terms of the agreement in writing to ensure that both parties are on the same page.

Whenever you and a counterpart reach agreement in a negotiation, you should be the one to put the agreement in writing. This gives you the opportunity to tie down any loose ends.

Example

You agree to lease 4,000 square feet of office space for $4,000 per month. As part of the deal, you agree to sign a two-year lease, and the building owner agrees to give you two months’ free rent. After the handshake, you offer to put the terms in writing. Tying down the loose ends in your favor, you write: Two-year lease commencing May 1, 2013

Price of $4,000 per month for 4,000 square feet, on a gross basis, not triple net (The difference between these small words can add up to hundreds of dollars each month. On a gross rent, the landlord pays all extra costs, such as taxes, garbage removal, cleaning fees, etc.)

Free rent for two months beginning with the May 1 move-in date (Some landlords like to put the free rent in the middle or at the end of the lease.)

Counter

If the landlord does not agree with how you have tied up the loose ends in your written agreement, he should immediately write to you, explaining how he thinks the issues should be handled. If he does not respond immediately, he will lose tremendous bargaining power when the two of you reconvene at the negotiating table.

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

Summary: Using competitive bids to put pressure on a counterpart.

In most businesses, The Power of Competition can be devastating. The seller, who knows that a customer can easily go to the competition for the same product or service, has to justify everything and may end up giving away more than originally planned. Just the threat of competition may be enough to force concessions.

Example

Using The Power of Competition, a client states, “I have gotten three bids, and yours is five hundred dollars higher than the other two. I would really like to work with you, but your price is too high.”

Counter

To counter this challenge, the vendor should defend her price, citing her product’s quality and service. Once we were out on a sales call with a seasoned veteran who responded to a client’s question about price by stating matter-of-factly, “Mrs. Jones, my price is higher than the competition’s because I am the one who is going to do the job right.” He said this so confidently that he convinced the client and us.

Another approach is to ask the client to show you the other bids. In some cases, you might be able to detail how your service or product surpasses the other bid.

Finally, realize that many clients will say your price is too high just to get rid of you when they have no intention of working with you even if you do lower your price.

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

Summary: Conceding on a deal point that is not as important to one as the larger goal.

To promote the long-term best interest of a relationship or accomplish a larger goal, conceding a deal point may sometimes be the best option.

Example

A woman wants to purchase a brand new home that is going to cost almost $150,000 more than the home she and her husband are currently living in. Taking on that much new debt scares her husband. He tells his wife that the new home is a huge financial stretch for them and he doesn’t think they should buy it at this time. The wife responds saying she would consider staying in the current home if they could get new carpet and have the kitchen remodeled. Knowing that these changes will cost him a lot less than the debt on the new home, the husband agrees to the carpet and remodel.

Counter

The wife already countered in this negotiation by presenting the remodel as an alternative to purchasing a new home. To maintain a healthy relationship with her husband, she might want to accept this win-win outcome.

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