Negotiation Tips by Allan Stitt
There is a difficult balance in negotiation between threats and making sure the other side realizes the consequence (to them) of not reaching agreement.
A lot of people talk about expanding the pie in negotiation, but not everyone knows what it means. Basically, expanding the pie is finding ways to create value in a negotiation.
We all think we’re fair but we’re all in danger believing our own partisan perceptions. We think we know what others are thinking and how they’ll act and we convince ourselves that what we see proves what we thought would happen. The best negotiators reject their partisan perceptions and try to see what the other person is really saying and doing.
Some negotiators think that they get the best deals by being pushy. They think that others are sheep and need to be pushed around. They push and push and wait for others to cave in.
Are the best negotiators quiet or more talkative? There’s no correct answer to this question. We all have to be comfortable with our own style. If you’re a talker, you won’t be comfortable just listening; if you’re quiet, you won’t want to dominate discussions.
Can you negotiate with your wife or husband? Of course. You do it all the time. You decide who cooks, who takes out the garbage, who walks the dog and what movie you go to. These are real negotiations that require real skill.
When we think about negotiation, we obviously first think about negotiation with others, but we also negotiate with ourselves. Those are sometimes the toughest negotiations. And we break our agreements with ourselves all too often.
ALLAN: Just because something’s negotiable, Jase, doesn’t mean the other person has to agree. When you speak to your Prof’s, show them that you understand that they have to be fair to everyone and maybe then they’ll be more inclined to listen to you.
A client recently asked me why negotiations always have offers and counter-offers; why can’t people just give their real bottom line at the beginning and save time? It’s not necessarily logical but it is true that many people need to see the other side make concessions before they say yes to a deal. It’s in your interest, therefore, to start with an initial position that you can make a concession from.
ALLAN: I’ve often been asked to create a course on negotiating with teenagers.
MELANIE: It’s easy, dad. Just agree to everything we say.
ALLAN: I figured you’d say that. Another option is listening, brainstorming and being open to be persuaded.
MELANIE: I guess that works too but I like it better if you agree to everything I say.
We often hear about random acts of kindness and something inside of us wants to see the kind person benefit in some way. It only seems fair. Some of us even act on this and try to do something nice for the person who was kind. This is especially true if they’ve done something nice for us. When you receive a gift, you like to give a gift in return.
This is also true in negotiation. Random acts of kindness are often reciprocated. Some negotiators make a habit of giving the other side gifts in the middle of a negotiation, to try to improve the relationship between negotiators and make the other person want to be kind in return. That is not to suggest that it’s always a good idea to give things in negotiation but there are situations where giving gifts can benefit you.
Most people think that the negotiation ends when the two sides shake hands or sign an agreement. The deal is done and they should stop negotiating. The truth is, though, that there’s a lot more to negotiate.
First, most negotiations need implementation and it’s a rare situation where there aren’t things we need to negotiate after we shake hands. If you’ve negotiated in an ethical way and preserved the relationship, you should be in good shape to deal with implementation.
There’s another opportunity, though. Once you’ve agreed, you can still see whether you can make the deal better. This is known as trying to make the deal Pareto superior or Pareto optimal.
When we negotiate, we keep information confidential. While that may help us not be taken advantage of, it may prevent us from coming up with creative options. Once we reach a deal, we can disclose some of our confidential information to see if that allows us to make the deal better for both of us. If we can’t make the deal better for both, we still have the deal we’ve made to fall back on. The deal we’ve made is a binding deal unless we both agree to change it to a new deal. There’s no downside, therefore, to disclosing information to see if that allows you to improve on the deal you’ve already reached.
There are lots of negotiation tricks out there. Some people always like to have the tallest chair; they want to sit at the head of the table; some like to make sure they have more people on their side of the table than you have on yours; some like to make you face out the window so that you’ll be distracted.
I find that, not only to these tactics rarely work, they often backfire. I really like it when someone tries one of the ‘tricks’ on me because it usually gives them a false sense of security. They become so focused on the trick that they often don’t focus enough on meeting their interests (or those of their clients). I try to make them feel superior while I negotiate a really good deal for me.
We are all emotional, to a degree. Some of us show our emotions outwardly while others keep emotions in check. Many people think that effective negotiators hide and stifle emotions and that a show of emotion is a show of weakness. I disagree.
Emotions are real. We cannot make them go away. They exist whether we want them to or not. The good news is that we can use emotion to our advantage in negotiation. There’s nothing wrong with being passionate about something. That can sometimes cause the other person to want to satisfy your passion.
Even if you’re upset, it’s not necessarily bad to show that you’re upset. Most people, when dealing with someone who is upset, try to find a way to take away the stress from the negotiation and calm the waters. They look for ways to make you feel better. That’s usually not a bad thing.
Most people prefer if the other side makes the first offer. We’re afraid that if we make the first offer, it may be too good for the other side and they’ll quickly accept, or it may upset them and they may walk away. Those are valid concerns and effective negotiators make offers that limit the likelihood of either of those scenarios playing out. For example, when they make first offers, they don’t present them as ultimatums, but rather as options. Also, they try to base their offer on an objective, fair standard, but one that is good for them.
There are also benefits to making the first offer. People who put the first number on the table set the parameters of the negotiation, for example. They also set the process for how offers should be made.
Because many people prefer to receive first offers, negotiators often have to go through a long, drawn-out ‘dance’ where both sides are waiting for the other to make the first offer. The person who does offer first breaks the ice and allows the negotiation to move forward.
This is not to suggest that it’s always a good idea to make the first offer; that said, there are benefits to offering first and sometimes that can give the person who makes the offer a strategic advantage.
Most people assume that it is not possible to negotiate with retailers. There is power in a price tag. When we see a price in a store, we assume that’s it. In a lot of cases, of course, that’s true and there is no ability to negotiate the price of many items that are for sale in retail stores. In other situations, though, there is an opportunity to negotiate.
The trick is to ask. It’s an easy trick but so few people actually ask. The retailer can always say no. There was a study I read about at the University of Pennsylvania where business students experimented with trying to negotiate for items for sale in retail stores. They were amazed to learn that, in many cases, they received significantly better prices simply by asking.
Price isn’t the only thing you can negotiate when you shop. You may be able to negotiate terms of payment, free shipping, a free ‘throw in’ or some other non-financial benefit. You’ll never know until you ask.
How much do you have to sacrifice ethics to be an effective negotiator? The answer is not at all. Some people believe that you have to mislead to be an effective negotiator and, in my experience, that’s just not true. The most effective negotiators have learned the techniques that allow them to be completely honest and ethical and still negotiate the best deal. There are ethical and effective approaches to all negotiation problems. Those who sacrifice their ethics have short careers. Everyone knows who they are, people don’t trust them and people don’t want to negotiate with them.
It’s December and there’s a chill in the air, but is there also a chill at your negotiation table? We focus a lot on what we say in negotiation but not nearly enough on how we say it? We focus a lot on the substance of what we’re negotiating but sometimes ignore the process. A friendly, open attitude toward someone else often causes them to be friendly and open to us. If you’re both open and friendly, you’re more likely to be able to work out a good deal.
When we want to persuade someone, we often tell them why we’re right and they’re wrong. As we all know, this rarely persuades them, and yet it’s the technique most people use to try to persuade. The problem is that others rarely believe they’re wrong, and they’re rarely persuaded just because we tell them they’re wrong. Instead, show that you’re open to their ideas and explore different options with them. Try to get them to persuade themselves because if they do, you don’t have to persuade them.
Salespeople are always negotiating with customers. What’s the biggest mistake they make when they’re trying to sell something? They talk about what they think their customers want rather than listening to what their customers have to say and reacting to what they say. Customers and clients give us lots of clues about their needs and interests, but we don’t always listen. The best salespeople don’t presume they know what their customers want; they ask lots of questions, listen to the answers, and then give their thoughts.
It’s back to school time for the kids, but how about for you? How much are you leaving on the table in your negotiations? What deals aren’t you making? What do others know about negotiation that you don’t know? No matter how much natural ability you have, you can improve your negotiation skills by learning the latest techniques. Have you wondered why professional athletes still need coaches? The athletes are very skilled (most of them, anyway), of course, but they know that they can still get better with coaching. If you learn one technique at a negotiation course that gets you one better deal, isn’t it worth it? (Ok, I know it’s not really a negotiation tip but I hope you’ll let me get away with a bit of a sales pitch this once.)
How do you convince someone that your proposal is ‘fair’? Fairness is a subjective concept and people have different ideas of fairness. Just because you think something is fair doesn’t mean the other person will think it’s fair. One suggestion is to look to comparables or objective criteria, because people are more persuaded by an objective standard than by you saying that you think something is fair. Objective standards are criteria that are outside the specific negotiation; something both sides can look at and agree is fair. For example, if you’re buying or selling a house, you would want to know what similar houses have sold for recently.
Sometimes we forget that many of our conversations with family members are negotiations. We are trying to persuade them and they’re trying to persuade us. We might negotiate about whether or where we go to dinner, who takes out the garbage, when the children go to bed or where we’re going to live. Effective negotiators, the people who have the tools that let them persuade, are effective both at work AND at home. One of the tools that effective negotiators use is that they consult before deciding. People don’t often like or appreciate it if others make decisions for them. This is true even if the decision is a good one. If you consult with people before you make your decision, they’ll feel that their voice has been heard and they’ll be more likely to accept the final decision.
A good negotiator is a creative one. We need to find creative solutions to problems so that we don’t get locked in a fixed-sum negotiation. But how can we be more creative? One idea is to have a brainstorming session in your negotiation where all involved try to come up with creative ideas. Brainstorming works best when you employ two ground rules: first, no criticism of the options that are being generated; second, no commitment to the options – they are options, not offers. If we free ourselves from having to worry about whether an option is a good one, we’re more likely to come up with creative options.
The word ‘but’ is the great eraser in a negotiation. It erases everything good that you said before the ‘but’. If I say to you, ‘you have a good point but you’re wrong’, you’re more likely to focus on the second part of what I said (the ‘you’re wrong’ part), and miss the fact that I said you have a good point. When we use the word ‘but’ in the middle of a sentence, we can lose the good things we’ve said before the ‘but’. If you can restructure your sentence and use the word ‘and’ instead of ‘but’, it can often help. For example, if I had said, ‘you make a good point and we also have to look at some of the difficulties we’ll encounter if we go down that path’, that would have been a lot easier to hear.
When we have something important to say, it dominates our thoughts and we feel a strong need to get it out. Unfortunately, the impact on others can be that they see us as pushy and unwilling to listen. When we listen to others first, they are more likely to want to listen to us. If we can take the time early in a negotiation to show others that we’re listening to them and THEN put forward our ideas, they’ll be more likely to hear our ideas.
“Why” is the most important question in a negotiation. It gets us information about other peoples’ interests, wants and needs. The more information we have, the more likely we’ll be able to find a solution that works for us and for the other side. It’s hard to ask too many questions; we often ask too few. We are sometimes so focused on getting our point across that we don’t take the time to learn the information that we need to know in order to reach an agreement. We make wrong assumptions and get bogged down in time-wasting and unnecessary debates. Remember that we have two ears and one mouth and should use them in proportion!
People often start a negotiation with their position. Your position is what you think the final result should be. The obvious rhetorical question is, should we really start a negotiation at the end, with the result, or should we work our way to a result and come up with a position later in the negotiation?
If we take the time to hear other peoples’ ideas, find out about their interests and learn what’s important to them, we’re more likely to craft an answer (a position) that they will find acceptable. If we lock ourselves into a position early in the negotiation, we may find ourselves arguing over positions rather than searching for good answers.
Sometimes you have to negotiate with someone who seems to have all of the power; for example, you may have to negotiate with your boss. That doesn’t mean there’s nothing you can do. We all have the power to be more persuasive negotiators and use techniques that will cause others to do things that we want them to do. For example, when you’re negotiating with your boss, you can refer to objective criteria or standards of fairness as a way to persuade. Everyone likes to think that they’re being fair and if your boss sees that he or she is not being fair, they may change their approach.
What is power in negotiation and how do you address a power imbalance? A common concept of power is that people have power in a negotiation if their walk-away alternative is really good. If you want to improve your power, therefore, you need to find a way to improve the situation if you walk away. Take some time before the negotiation to consider the possible consequences of not reaching a deal, and see if you can make the situation better for you. If you do that, you’ll feel a lot more powerful in the negotiation.