Become A Master Negotiator

Summary: Getting to know your counterpart to establish a mutual trust.

Although sharks would debate the value of this tactic, being nice and friendly helps build relationships. A counterpart is much more willing to work with you to create a win-win outcome when he likes and trusts you.

Example
You know your negotiation counterpart is an Amiable, so you spend the first five minutes of the negotiation talking about each other’s families. Counterparts who are Drivers and Analyticals must make a conscious effort not to leave out this piece of the negotiation puzzle. Amiables respond better to counterparts who take the time to build some rapport. (Click here to learn more about behavioral styles in negotiation.)

Counter
Some counterparts will go on and on establishing rapport, never getting to the reason they are meeting in the first place. The best tactic to get things back on track is to ask a question to change the direction of the conversation. A counterpart might eventually tell the Amiable, “It sounds like you had a great vacation last week. Now, as far as this week goes, when were you thinking about implementing this new manufacturing accounting system?”

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

Summary: Convincing a counterpart that everyone is doing it.

One of the most powerful ways to sell a customer on the merit of your product is to convince the customer that everyone is using that product. In fact, sales are going so fast you can’t keep it on the shelf. The insinuation is that if your counterpart doesn’t buy in, he will lose out.

Example
If the offer of a free dinner, a weekend’s lodging, or a gift certificate has ever succeeded in luring you to a sales presentation for a timeshare, you know how persuasive the sales team can be. Once you have been captured by your “personal vacation consultant,” you are told how very reasonable this offer is, that you typically spend more on a week’s family vacation than you would on a timeshare, that you can trade the share for another property—and on and on. To raise the excitement level and encourage you to commit, the salesperson tells you that the opportunity for you to buy is very limited. Typically, you are in a room where other couples are also meeting with their “vacation consultants.” Public announcements are made periodically, stating that various properties are no longer available. The pressure builds and it takes extreme courage not to sign on the dotted line.

Counter
The most effective counter is These Boots Are Made for Walking. Depending on your tolerance for pain, you can either walk out and forgo the “freebie” or tough it out to the bitter end and collect your free gift. If, on the other hand, you are really interested in the timeshare, you could counter with the tactic of Good Guy/Bad Guy (with your partner playing the bad guy who wants to nix the deal) to gain some leverage, or use Sweetening the Deal to try to get something extra thrown in the final package. Another effective tactic is I’ll Think About It and Get Back to You Later.

Summary: Increasing penalties if the counterpart does not make a decision.

This tactic, which is similar to No More Mr. Nice Guy, is useful when a counterpart starts making unreasonable demands or causing excessive delays in the negotiation. You start taking punitive action, creating the feeling that your counterpart has One Foot on the Dock and the other foot in the boat—and the boat is slowly moving away from the dock.

Example
The owner of a commercial building decides to refinance her property since interest rates have dropped significantly. She is negotiating with two banks to try to get the most competitive rate. Using the Power of Competition, she keeps gaining concessions from both banks. Pushed to his limits, the loan officer of one bank finally tells the building owner that if she does not sign a letter of intent to lock her loan in at 5.75 percent by Friday at 5:00 pm, the rate will go up to 6.00 percent on Monday at 8:00 am.

Counter

The easiest counter for the building owner would be to utilize These Boots Are Made for Walking, concentrating her negotiations on the other bank she is already working with or opening negotiations with a third bank. A second effective counter would be the Trade-off Concession. She could agree to sign the letter of intent at 5.75 percent if the bank will waive the appraisal fee. Finally, she could employ the Calling Your Bluff tactic, telling the loan officer there is no way she can make a commitment by Friday, so if the bank cannot hold the 5.75 percent interest rate, there is no need to continue the negotiation.

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

Summary: Arranging for a counterpart to visit one’s site or the site of another customer.

Any time you can get your counterpart to leave her office and visit your site or the operation/installation of one of your customers, you obtain leverage. One reason this approach works so beautifully is that it also employs the tactic of Investing Time by getting your counterpart to spend time and energy on the negotiation, which raises her level of commitment. A second reason this tactic is effective is that it gives you the opportunity to show your counterpart how well the item you’re selling works in real life. This enables your counterpart to envision herself using your product or service.

Example

A contractor invites a potential customer out to an office he recently renovated. The customer is happy with what she sees and can picture the changes she wants done in her building.

Counter

To protect herself, the buyer needs to make sure she has the ability to walk away from the other office without feeling obligated to make a decision on the spot. This ability to walk away will help maintain balance in the negotiation. To make sure she has all the facts, the buyer could plan her own Field Trip (possibly to another office renovated by a competitor). The more knowledge she gains about the competition and the contractor’s work, the better off she will be. She might even seek out customers who are dissatisfied with their work. Any information she acquires will help her gain leverage if she decides to continue negotiating with the first contractor.

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

Summary: Outnumbering the opposition.

Showing up to a negotiation unexpectedly and in large numbers can have tremendous impact.

Example

A developer goes before the city council to try to get approval for a project. Much to the developer’s surprise, over 200 citizens show up to oppose the project.

Counter

Advance preparation would have made a counter unnecessary in this situation. If the developer had been well prepared, he would have had some idea of the magnitude of his opposition.

Once The Ambush has taken place, the developer might request a postponement in the negotiation for time to regroup and decide on a new strategy. If the developer doesn’t want to postpone, or fails to obtain a postponement, his next option is to try to sell the decision makers on the benefits of his project. He could talk about the number of people his development would employ and the number of tax dollars the project would generate for the city, as well as express his willingness to work with a citizens’ advisory group made up of some of the people who oppose the project.

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

Summary: Using the power of the relationship with the counterpart to get concessions.

Once in a while you may want to remind your counterpart of your long-term relationship or provide some specific details about your circumstances that your counterpart may not be aware of.

Example

A bank sends a corporate customer a monthly loan statement. The statement contains a $50 charge for a loan payment that was received five days late. The accountant for the corporate customer calls the loan officer at the bank and states, “I have a problem and I need your help. For whatever reason, you received our loan payment five days late. Considering our ten-year relationship, I’m hoping you can make a one-time exception and waive the late charge.”

Counter

If the bank’s goal is to build a long-term relationship with the customer, our recommendation would be to grant the one-time waiver. Adding a Safeguard might be wise. The bank could send the customer a letter granting the one-time waiver, but specifying that if the problem recurs, a $50 late charge will be imposed.

If the bank’s only goal is collecting the $50 late payment, two counters would be effective. First, the loan officer could tell the customer that the late fees are Standard Practice or Policy for the bank and, as such, are nonnegotiable. Second, the loan officer could use Good Guy/Bad Guy, offering to ask her manager for permission to waive the fee, and then coming back and saying that her manager refused.

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

Summary: Imposing a time limit for making a decision.

At any time during a negotiation, either party may Set a Time Limit on agreeing to a particular deal point. But remember, you don’t have to accept any limits your counterpart sets. In fact, it’s a good idea to question all of your counterpart’s limits. On the other hand, it’s also a good idea to go into a negotiation with your own limits in mind.

Example

You make an offer on a house. The seller counters with a price that’s two thousand dollars higher, and gives you just twenty-four hours to make a decision.

Counter

First, you could counter with the tactic of Asking an Open-Ended Question, and inquire why the seller is imposing this time limit. Second, using the tactic of That’s Not Good Enough, you could tell the seller that the time limit is unacceptable–just make sure you’re prepared to walk away. A third option would be Moving the Deadline: tell the seller you can’t respond within twenty-four hours, but will reply in forty-eight hours. This tactic would give you more time to make a better decision. Fourth, you could simply ignore the time limit.

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

Summary: Appealing to a counterpart’s ego.

One effective way to gain leverage in a negotiation is to use Flattery or Sweet Talk. When used effectively, flattery has the impact of motivating the counterpart to respond.

Example

The president of a nonprofit corporation asks a speaker to give the opening address at the organization’s fundraising dinner. The president begins his request with the statement, “Although I don’t have the budget to pay you, I need a great speaker and you are the best I know.” This type of flattery, combined with the opportunity to do something for a worthy cause, makes the request hard for the speaker to turn down.

Counter

If the flattery seems sincere, the speaker should express her appreciation. But, it’s important for her to be able to set the flattery aside when making a decision. If she wants to counter the offer, she can emphasize the importance or value of her speaking skills. A second option would be to ask for some compensation other than money such as a free advertisement in the program for the fundraiser.

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

Summary: Moving a counterpart toward an unpleasant outcome, then threatening to push.

When both sides in a negotiation have a great deal to lose if the negotiation fails and a great deal to win if it succeeds, the You’ll Be Sorry tactic can be useful. One counterpart pushes the other right up to the edge of some terrible outcome, then threatens one final shove.

Example

Lee Iacocca, former chairman of Chrysler Corporation, used this tactic of pushing his counterparts to the brink when he was negotiating with the automobile unions in the late 1970s. Iacocca’s goal was to have the unions accept a final wage package of $17 per hour. The union would not settle for any less than $20 per hour. One bitter night, Iacocca addressed the union negotiating committee. “It was one of the shortest speeches I have ever given,” he later recalled. He told the committee, “You’ve got until morning to make a decision. If you don’t help me out . . . I’ll declare bankruptcy in the morning and you’ll be out of work. You’ve got eight hours to make up your minds. It’s up to you.” In this example, Iacocca practiced You’ll Be Sorry, forcing the unions to the edge of the cliff and then threatening to push. Although the unions did concede, this historic Chrysler story turned out to be a win-win for everyone: the workers, the government, the company, and Lee Iacocca.

Counter

If a counterpart uses You’ll Be Sorry against you and you believe that your counterpart has the power to back up the threat, you have two choices: You can utilize These Boots Are Made for Walking and accept the consequences, or you can decide what is most important to you and use the Trade-Off Concession to negotiate other deal points.

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

Summary: Trying to influence a deal point by offering the ideal way to fulfill all of a counterpart’s needs.

When your counterpart lays a proposal, solution, or deal point on the table, it’s a good idea to test how strongly that counterpart feels about his or her position. One great way to do this is to offer your counterpart The Perfect Solution.

Example

A general contractor provides a proposal to build a patio and barbecue for a homeowner for $15,000. When the contractor states the price, the homeowner responds that he doesn’t want to spend any more than $12,000. The contractor replies, “If I could design and build for you The Perfect Solution to all your patio and barbecue needs, would you be able to come up with the additional $3,000?”

Counter

The homeowner could counter with the tactic of the Higher Authority, blaming the budget on his wife, equity line of credit, or someone or something else with decision-making power. Second, he could utilize the tactic of Asking an Open-Ended Question and ask the contractor, “If I can’t find an additional $3,000, what would you recommend I do?” Third, he might try the Reward in Heaven tactic, suggesting, “If you could build the patio and barbecue for close to $12,000, I will be a great reference for you in years to come.” Fourth, he could ask the contractor for a breakdown of the costs to see if there are any parts of the project he could do himself.

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