Become A Master Negotiator

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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Summary: Using silence to get a counterpart to talk.

When your counterpart is a talker and you want to learn as much as you can about the product, service, or counterpart without making any type of commitment, saying nothing and letting your counterpart do all the talking may be the best tactic. If you do not say anything, there is nothing for the other person to counter.

Example

A salesperson is making a presentation on his product. The potential buyer sits and listens to the presentation without saying anything. The salesperson even asks twice if the buyer has any questions about the product. Each time, the buyer just shakes her head “no.”

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Summary: Selecting the midpoint between two counterparts’ offers.

When two parties are apart on an issue and the negotiation seems to be at a stalemate, one counterpart can offer to split the difference with the other.

Example

You are buying a car and do not want to pay any more than $5,800. The seller does not want to come down any further than $6,000. Since you are $200 apart, either of you could offer to split the difference and do the deal for $5,900.

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Summary: Promoting full disclosure by informing a counterpart of both the positive and negative aspects of a proposal.

This tactic is wonderful for promoting full disclosure in a negotiation, and it helps build stronger bonds of trust between counterparts. When you use this tactic, you communicate to your counterpart both the benefits and the possible downsides of a proposal. This tactic is very powerful because you gain points for being honest when it costs you something to do so. Providing the cons usually costs you something.

Example

A person is selling a beautiful home with a large yard. When a prospective buyer walks through the home, the seller tells the buyer, “This home has a gorgeous view, a beautiful yard, a great school district, and fantastic neighbors. It also comes with a water bill of four hundred dollars per month to support the beautiful yard. I think the water bill was my only surprise when I moved in seven years ago.”

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Summary: Sticking to minor concessions in the opening rounds of a negotiation.

Here’s a good rule of thumb: If you are going to concede in the opening rounds of a negotiation, Concede Small.

Example

You are selling your house and your asking price is $550,000. You receive an offer of $500,000. Instead of countering with $525,000 in the first round, which is what most people would do, you counter with $548,250. This small concession is a better starting point for this negotiation.

Although negotiating this way takes time, conceding in small increments makes it more likely that you will end up with $540,000. If you immediately counter the buyer’s offer at $525,000, he will probably counter with $512,500, and you will end up getting less money for your house.

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Summary: Using an open-ended question to get more expansive or revealing information from a counterpart.

Open-ended questions almost always start with who, what, where, when, how, or why. They play a strong role in negotiations as techniques for gaining as much accurate information as possible.

Example

Carrie is in the market for a used car. She wants to buy one from someone who has completed the scheduled maintenance. More specifically, she wants to buy a car from someone who has changed the oil every three thousand miles. She thinks about asking a closed-ended question like “Have you changed the oil every three thousand miles?” But since the owner would know the answer Carrie wants to hear, she is afraid he would answer “yes” even if the real answer was, “Yes, when the car was new, but over the last year, the oil has never been changed.” She decides to use an open-ended question to gain more complete information, and says, “Tell me what type of maintenance has been done on this car.” This request has to be answered with details instead of a simple “yes” or “no.”

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