Become A Master Negotiator

Summary: Telling a counterpart to go ahead and act on a “threat” or “challenge” she has issued.

Once in a while, one party in a negotiation may say something outrageous in the belief that his counterpart does not have enough information to challenge him. The appropriate tactic in this situation is to simply call the first party’s bluff.

Example

A home seller tells a potential buyer, “We have already had an offer to buy this house at a price higher than yours.” The buyer calls the seller’s bluff, asking, “Why didn’t you sell your house to the buyer with the higher offer?” This is a great question, since it will probably help Uncover the Real Reason the home seller is still negotiating.

A second common example is a slight variation. A person buying a product might say, “I don’t even need your product.” Once again, the appropriate question is, “If you do not need my product, why are you even taking the time to talk with me?”

Counter

You do not need a counter to this tactic if you are negotiating honestly and providing full disclosure. In the event that a counterpart tries Calling Your Bluff with a good question, simply reply, “That’s a great question,” and give the honest reason why you are negotiating with him.

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

Summary: Asking a question to redirect the conversation.

It may not be in your best interest to answer a counterpart’s question if you do not have enough information to make an educated or appropriate response. In those situations, Deflecting an Answer with a Great Question is appropriate.

Example

A salesperson asks you, “If I could get this model in blue, your favorite color, would you be willing to purchase the unit today?” You respond by stating, “How long would it take you to locate a blue model and have it delivered?” You have not made a commitment, and at the same time you have asked a great question, which could yield information important to your purchasing decision. When negotiating to buy something, you can almost always make more gains before committing to buy than afterward.

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Summary: Apologizing for making a mistake or failing to meet all agreements.

The ability to say, “I am sorry,” or, “I made a mistake,” is a strength, not a weakness. When you are humble, your counterpart finds it easier to like you and work with you to create a win-win outcome.

Example

A printing sales representative receives a large order from a client. The client’s order is supposed to be completed by a specific date, but something happens at the printing plant and the delivery is late. The client is disappointed and is not planning to use the same printing company in the future. But the sales representative makes a special trip to the client’s company to personally apologize for the tardiness of the delivery. The sales representative’s obviously sincere apology convinces the client to continue to utilize the printing company’s services.

Counter

In this situation, the damage has been done. It would be appropriate for the client to accept the sales representative’s apology and then put a Safeguard in place to guide the future relationship. For example, “If you are ever late on one of my jobs again, I will not accept delivery.” Safeguards are negotiated so that remedies are in place in case the problem ever recurs in the relationship. The client could also negotiate an add-on, or something extra, for the inconvenience.

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

Summary: Forcing a counterpart to let go of past issues and look at what’s ahead.

Sometimes counterparts get into conflict and start blaming each other for negative things that have happened in the past. (This is as common in marriage as it is in long-term business relationships!) Getting stuck in the past can make it very difficult to create a win-win outcome, since all the negotiators are busy blaming their counterparts or defending themselves. Under these circumstances, it may be in your best interest to Focus on the Future.

Example

A manager is counseling an employee about poor performance on the job. Each time the manager brings up an example of the employee’s poor performance, the employee blames the specific problem on the manager or another department. Since difficult employees will defend their wrongful actions to their death, it is helpful to Focus on the Future. It would be appropriate for the manager to ask the difficult employee, “What will it take to have you produce a quality product next week?” Even the most difficult employees will help define the future.

Counter

If you are put in this situation and, for some reason, do not want to be held completely accountable for the results of the negotiation, the appropriate counter is the tactic of The Safeguard. In the example above, the employee might reply, “I will do what I can to produce a quality product next week, but if I do not get all the information and cooperation I need from other departments, I may not be able to accomplish that goal.”

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

Summary: Attempting to upsell a counterpart by offering extras.

One of the challenges everyone faces is the aggressive salesperson who pushes additional products or services. The perfect model of this tactic is the fast-food cashier who always asks, “Would you like fries and a drink with your double cheeseburger?” and attempts to upsell you on the Meal Deal.

Example

Sue is buying a new laptop and the salesperson says, “You really should purchase the extended warranty. If anything goes wrong with this laptop, we will fix it free of charge.” The salesperson convinces Sue to buy the extended warranty with the argument, “You just never know.”

Some people like extended warranties; others feel such warranties are a waste of money. Some individuals have purchased the warranties and, when the product has malfunctioned, have been unable to find the paperwork, so the retail chain would not honor the warranty anyway.

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Summary: Asking questions to reveal any hidden motives behind a counterpart’s rejection of a deal point.

To be an effective negotiator, you have to learn to Uncover the Real Reason behind a counterpart’s resistance.

Example.

Jack is refinancing a home. His mortgage broker itemizes all the charges associated with securing a loan. Jack asks if the fee for the appraisal for the house can be waived since he had an appraisal done six months earlier and would like to use that appraisal. The mortgage broker says that getting an appraisal is standard company policy and her boss would never approve of waiving the appraisal or the fee. To find out if there is another reason the broker does not want to waive the fee, Jack could ask to speak directly to the broker’s boss. If the explanation the broker has given is not exactly accurate, the broker will probably make a concession. Better yet, if she does let Jack talk to her boss, he may succeed in gaining something he would not have gained if he had not used this tactic.

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Summary: Putting conditions on an agreement in order to protect oneself.

The Safeguard is employed when a relationship is new or you have little or no trust in it. The tactic is designed to protect you in the event that your counterpart does not live up to his negotiated deal point.

Example

A retailer or distributor offers to buy 50,000 units from a manufacturer for $1 per unit. The normal price for anything less than 50,000 units is $1.25 per unit. The manufacturer agrees to the $1 price but places a Safeguard into the contract that reads, “In the event that the distributor does not purchase 50,000 units by the end of the year, she will be back-billed 25 cents per unit.” Or the manufacturer stipulates that if the distributor has not ordered 50,000 units by the end of the year, the price effective in the new year will be $1.25 per unit. Both of these examples provide Safeguards to the manufacturer.

Counter

There are three effective counters the distributor could employ: (1) She could just Say “No” and Stick to Her Guns; (2) she could argue that her corporation has a policy that does not allow any type of back-billing; or (3) if she is interested in building a long-term relationship, she could negotiate a “tiered” price, agreeing to pay, for example, $1.35 per unit for orders up to 20,000, $1.15 per unit for additional units up to 40,000, and $1 per unit on any purchase over 40,000. Although shark-like negotiators might debate the wisdom of this last counter, being friendly and flexible helps build relationships. People are much more willing to help create a win-win outcome with a counterpart they like and trust.

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

Summary: Leaving the most difficult issue for the very end of the negotiation.

With this tactic, Isolating Agreement is taken to the extreme and the single most difficult issue is left for last. One example of an issue that is often the last to be negotiated is indemnification. When major corporations with deep pockets (e.g., utilities) negotiate contracts, they want to be indemnified, to avoid liability and prevent a lawsuit if any of their contractors’ products or services fail.

Example

A utility wishes to purchase a transformer from a manufacturer. Everything is negotiated, including the price and delivery dates. The last thing to be negotiated is the indemnification clause, and that is where the negotiation falls apart. The manufacturer insists that its legal department will not approve the indemnification clause as it is written, and the utility says it cannot purchase the equipment without the indemnification.

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