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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Summary: Bringing up information unrelated to the negotiation issues.

Some counterparts specialize in inserting a tangent, or side issue, into a negotiation that has absolutely nothing to do with the negotiation being discussed.

Example

A manager is discussing with an employee the importance of coming to work on time. In the middle of the discussion, the employee protests, “Other employees come into work late, and you do not say anything to them.” This is an example of Launching a Tangent to deflect attention from the real issue: this employee’s continual tardiness.

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Summary: Repeatedly stating a position and refusing to look at options.

One of the most difficult negotiators to deal with is the unilateral thinker who can see only one possible outcome to a negotiation. This negotiator’s attitude is, “My way or the highway.”

Example

An airline passenger is irate because the first-class reservation she thought was confirmed for her flight is not in the airline’s system and no other first-class seats are available. To every option the reservations specialist suggests, the woman reiterates, “My reservation is in the system. You have to find my seat.”

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Summary: Actively listening to a counterpart and empathizing with his feelings.

A counterpart who feels you do not understand his feelings, needs, or goals may build up a defensive wall. Breaking through that wall could make the negotiation take two or three times as long—or you might not succeed in breaking through the wall at all. Sometimes you are better off letting go of the facts in a negotiation and focusing on the emotions behind the facts. A counterpart who believes you are really listening to his needs and goals and understand how he feels is more willing to cooperate with you.

Example

We were hired by a school district to resolve a dispute it was having with some parents. The dispute revolved around the fact that a group of deaf preschoolers was left unsupervised on a playground. The preschoolers’ parents were angry about the lack of supervision. They were especially angry because they felt that everyone who represented the school district was busy documenting facts to “play it safe,” and no one really cared about the parents’ concerns. We began to facilitate the negotiation by listening to the parents express their concerns for nearly two hours. Then our first words to them were, “We have small children, too, and we can understand why you are upset.” The parents responded, “We would not have made such a case out of this situation if someone had listened to us as you just did.”

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Summary: Asking a counterpart what he would do if the position were reversed.

If your counterpart asks for something that is totally unreasonable or does not make good business sense to you, a great question to ask is, “How would you justify agreeing to such a position If You Were in My Shoes?”

Example

Two companies were in serious talks regarding a merger. Company A wanted Company B to agree to the following deal point: If the news of the merger became public and another merger bid was generated from a third company, B would pay A $1 million if the original merger failed to happen. When the president of A proposed this deal point, the president of B asked this great question: “If You Were in My Shoes, how would you justify agreeing to that position?” What usually happens when this tactic is used is that the counterpart who is the target of the tactic has to pause and think how he would justify his position. In the example above, if the president of A paused for a long time or avoided the question altogether, the president of B could have pointed out, “I’m having the same challenge figuring out how this deal works for me.”

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