Become A Master Negotiator

Summary: Adding an extra or add-on to make a deal work.

At times you may need to add a little something extra to make a deal work. For example, a salesperson may decrease the price of a product, add a warranty or training at no additional charge, or agree to extend a sale price to make a deal more enticing. This tactic of offering an extra or add-on is called Sweetening the Deal.

Example

A customer tells a carpet saleswoman, “Your carpet is a dollar per yard more expensive than your competitor’s.” The seller Sweetens the Deal by saying, “I will carpet each of your closets for free if you will sign the contract today.”

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Summary: Making a final, specific demand to force a counterpart to make a decision.

From time to time it may be in your best interest to “draw a line in the sand,” or create a rule that allows you to hold your counterpart accountable. One tactic you can use is to tell your counterpart the actions you will take if your conditions are not met.

Example

A client calls a consulting firm and asks to tentatively reserve a date for a seminar to be presented at her company in approximately six months. Three months prior to the date in question, the consulting firm calls the client and asks her to confirm the reserved date or the firm will have to offer it to another client who has requested the same day. The client is told that a confirmation is needed within twenty-four hours, which makes the deadline her Ultimatum.

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Summary: Getting something in return for everything that is given up.

A good rule to remember in negotiation is to get something in return every time you give up something.

Example

A home buyer states, “I will buy your house for $480,000, but for that price, you will have to throw in your washer and dryer.” The seller responds, “If I do that, you will have to close escrow in thirty days,” or, “You will have to pay $482,000.”

If the seller does not get a trade-off every time she makes a concession, her counterpart will most likely ask for more concessions. Then, if the seller suddenly says, “Wait a moment. I already gave you the washer and dryer, and now you are asking for more concessions,” the buyer can respond, “Why are you bringing up the washer and dryer? We already agreed to that.”

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Summary: Using statistics to support an offer or a point of view.

Anytime you can incorporate Facts and Statistics into your presentation, you have a tool that your counterpart will find difficult to handle. Reliable facts can add a tremendous amount of power and credibility to your case. But be careful—if you quote statistics incorrectly and your counterpart proves you wrong, you lose your credibility. Once this happens, you have to fight twice as hard to gain any deal point.

Example

An employee goes to his boss with a recently published salary survey documenting that the employee’s salary is significantly below market. The employee has pulled Facts and Statistics that examine salary levels by industry, position, and geographic location to demonstrate the discrepancy.

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Summary: Saying that the last offer is unsatisfactory in order to get a counterpart to make a better offer.

The idea behind this tactic is very simple. When someone makes you an offer you think could be improved, you simply respond, “That’s Not Good Enough.” Then pause and let your counterpart make the next response.

Example

Henry Kissinger, Secretary of State under Richard Nixon, was a master at this tactic. According to one story, his chief of staff once handed in a report he had written on an aspect of foreign policy. When Kissinger received the report, he asked simply, “Is this your best work?” The chief thought for a moment and, worried that his boss would think the report was not good enough, responded, “Mr. Kissinger, I think I can do better.” So Kissinger gave the report back. Two weeks later the chief turned in the revised report. Kissinger kept it for a week and then sent it back with a note that said, “Are you sure this is your best work?” Realizing that something must have been missing, the chief once again rewrote the report. This time when he handed the report to his boss, he said “Mr. Kissinger, this is my best work.” Hearing that, Kissinger replied, “Then this time I will read your report.”

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Summary: Pretending to be on a counterpart’s side while consulting another party who keeps vetoing deal points.

The Good Guy/Bad Guy technique is very similar to the tactic of the Higher Authority but is much more specific. With Good Guy/Bad Guy, one person pretends to be on your side and appears to help you make the deal. But every time you strike a deal, the good guy marches off to the bad guy for final approval. Naturally the bad guy will renegotiate the deal you have worked out with the good guy. Anytime you get into this scenario and do not expose the technique, you can end up with devastating consequences.

Example

If you have ever bought a new car, most likely you have experienced the frustration of being in a Good Guy/Bad Guy situation. After you have test-driven the car, the salesperson takes you into the closing room to draw up the initial deal. Since the salesperson cannot approve anything himself, he marches off to the sales manager to get the manager’s input on the deal. Then the salesperson returns and says that you are close, but the original deal will not work. What is scary is that dealerships go through this process whether your offer is a good one or a bad one.

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Summary: Consulting someone else before accepting an offer.

The tactic of Higher Authority can work for either counterpart in a negotiation. Sometimes you cannot get a situation resolved by working with the counterpart assigned to you. Perhaps the counterpart has decided not to comply with your request, or she may not have the authority to fulfill your request. So you have to go to a Higher Authority to obtain a satisfactory outcome. On the other hand, lacking the final say in a situation can create a very powerful position for your counterpart, since it provides her with the opportunity to take your request to someone at a higher level in the organization. We have frequently seen experienced negotiators work the best deal they can, then run off to a Higher Authority and come back with instructions for an even better deal.

Example

A real estate developer requests a line of credit from his local bank branch. The branch manager says that the loan has been denied by the loan committee (the Higher Authority) at the bank. The developer asks if there is anything he can do to have his loan reconsidered. The branch manager apologizes, but says there is nothing she can do once the committee has denied a loan.

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Summary: Expressing disbelief to encourage a counterpart to make a better offer.

Successful negotiators are good at acting surprised. They communicate the YIKES! You’ve Got to Be Kidding! message with a flinch, a sour face, or an expression of disbelief anytime a counterpart mentions the price or conditions of a product or service. We used to think this tactic was rather silly until we realized how effective it was when someone used it on us! Failing to act surprised when price or conditions are mentioned could encourage your counterpart to take advantage of you.

Example

A salesperson says, “The price for printing hard cover copies of your book will be seven thousand dollars for a thousand copies.” The author responds, “You’ve got to be kidding me! Why so much? We can create an e-book for just about nothing.”

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Summary: Holding firm on an issue.

Sometimes the most effective tactic in a negotiation is simply to say, “No, I am not going to do that” or, “That will not work for me.” This is an easy tactic to utilize, although it may be difficult for people who value being nurturing and supportive.

Example

A woman is purchasing a T.V. and the salesperson who is writing up the order states, “Almost all our customers find tremendous value and peace of mind by extending the warranty by an additional three years.” The woman responds by simply stating, “No, I am not going to do that.”

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