The Negotiation Guru

When you do want them to go first, how do you make them go first? And you definitely do not wish to end up in a verbal judo.

“What do you think of this?”

“Why don’t you go first?”

“No, how about you go first?”

“Ya, I will go first after you go first?”

“What?!”

This can get really irritating. And it’s off to a really bad start. Try some of these strategies to get them to open.

1.     Act like you are the fool

Once in a while, we have to play dumb to get things our way. The reason why you want them to open is probably because you lack the information to open. And you can make use of that fact. Play to their expertise and use it to your advantage.

“You are in this industry for a long time and I am really new to this. Tell me what’s a good price for this?”

“I think you should know what’s a fair price since you have done many similar deals before.  Trust that you will give me a good price.”

2.    Suggest an offer based on the information they give

When you start discussing the issues with the other party, you are both revealing information about your interests and concerns. You can try to suggest an offer even if they do not explicitly state one.

“If I hear you correctly, the best price you are willing to give is about $600 000?”

“Are you trying to suggest that if i get 20 of this, you are willing to let it go around $200 each?”

“You mentioned that you are unhappy with the after-sales service. Does that mean that you are willing to pay higher if we do something to improve in that area?”

If the other party is not agreeable to what you suggested, they might try to open with something. Note that you are not opening in this case. You are merely suggesting an offer the other party might make. Always try to start with a range and not a single number.

3.   Start by suggesting something

“I was looking at the bluebook. If i’m not wrong, people are selling your car around the range of $40 000 to $70 000.”

“I saw similar mp3players around, they are all around the range of $200. Is this particular model in that range?”

If you mention that the range is something you “read/heard”, it does not mean you are giving an offer. Give him a chance to correct your range. When the other party comes up with a counter-offer, you will roughly know the range to start negotiating. This will also prevent opening with an offer that is totally out of range and offending the person you are negotiating with.

Sometimes we do get to deal with someone who’s really pompous. I know, you just feel like kicking him in the ass. This type of people dominate conversations. “Listen” is not a word in his dictionary. You are going to face a lot of difficulty trying to get him to shut-up and listen to you. What do you do? Listen!

Never try to rebuke, use sarcasm or attack him back. Perhaps he is really narcissistic and seeks every opportunity to try to showoff. Help him to achieve what he wants. If he wants glory, tell him how closing this deal with you can achieve that goal. If he is concern with his own personal reputation, tell his how closing this deal can do just that.

Everyone seeks recognition. This is even more so for him. Give him what he wants. Stroke his ego if you have to. An important thing to note is that you have to make him keep his promise. You don’t want them to call him the next day only to find out that he has decided to change his decision. Keep everything documented. Get him committed and you are set to go.

As I was driving this morning, I discovered something about human psychology. Or rather, I was under the effects of human psychology. I was driving and decided that I should take the right lane as it had faster traffic. As I drove on the right lane for 5 mins, it became really slow. Cars were moving very slowly, and the cars on the left lane were zooming past me. Subconsciously I was telling myself, “The right lane will be faster, I am pretty sure about that”. I stuck to my original decision for a good whole 10mins.

Suddenly, I realized that I was not making a rational choice. I should have switched to the left. So why didn’t I do that?I had invested too much into right lane. To prove that I was right, I stuck to my own decision despite it was not a rational thing to do. This is common to investors who invest in the stock market. They always sell the stocks that are earning and keep the stocks that are losing money. And this is because they want to prove that their initial judgment is right.In negotiation, we often get too committed to a deal. We invest our time and effort into preparing a deal and negotiating it. As time passes, we grew more committed to closing the deal. People say yes to a bad deal because they have invested too much and feel that they will lose more if they have no deal.Avoid getting hooked into such a situation. Always have a bottom-line and never compromise on your goals. Sometimes, no deal is better and a bad deal.

Many seasoned negotiators will tell you, never to say “No”. This is true. It has huge psychological effects and will dramatically affect the results of your negotiations. Even if you do not agree with the proposal, use other ways of saying “No”.

Never give a straight “No” answer.

1) “I don’t think this really works for me.”

2) “Can I suggest another alternative?”

3) “Maybe we can discuss this further.”

4) “I like your proposal but there are some points which I will need to clarify.”

5) “Let me think about it, I will get back to you.”

6) “I can’t do this but I can…”

7) “I understand your situation but I can’t confirm anything until …”

Always be polite, yet firm. Not that you have to be nasty to be firm. Recall how you were turned down by others in subtle ways. Learn from them. It can avoid hurting the other party’s pride as well.

Remember: Learn to say “No” in as many different ways as possible.

————–
Jens Thang
Unleash The Negotiation Guru In You!

Email: jens@thenegotiationguru.com

I cannot stress further the importance of building rapport. Today, I was asked to negotiate with a food vendor. My organization is having a Halloween party this Saturday. We have been getting pizzas and hoagies for all our events. This time round, we decided to try Chinese food.

Yes, that means I will have to negotiate against a Chinese (not a favorite race to negotiate against – poll done).

What did I do to gain such success in my negotiations? By building rapport.

The moment I was introduced to the owner, a lady, I built rapport immediately. I spoke her language (literally and figuratively).  We corresponded in Chinese (again, not a favorite language of mine).  I introduced myself and told her the purpose of my visit. There were many tools that I used during the entire negotiation. But what really nailed it, was the rapport we had. She was all smiley after we closed the deal. It was a true win-win-win situation. She wins, I win and my boss wins. He gets to spend the money I save for him on booze.

 Everyone ends up winning. I love my job.

There are some people who resist giving information. You might ask “how do I discover interest if the other party resist giving information?” Simple, learn to deal with them.

You:     “How did you come up with this decision?”

Target:  “Because I want it to.”

You:     “Is it because you wanted….and….” (you begin to hypothesize)

Target:  “Oh please…*roll eyes*…give me a break. I just wanted it this way. Period.”

What can you do? 1) Get them to talk about their decision.Ask them about their decision again.“I didn’t quite get your decision. Can you say it again, please?”

More often than not, they will restate their decision, use other verbs and elaborate on their decision. When they start elaborating, do nothing but listen! This is your golden opportunity to find out their underlying interests. You can carry on asking for clarifications on the terms and details. 2) Locate the “voice” behindYou will be surprised that sometimes the people you negotiate with are just puppets of the main decision makers.An experienced negotiator once said “The worst person to negotiate for the President is the President himself.” The decision makers often get people to negotiate on their behalf.

You can question your target : “Who says it has to be done this way? Can I talk to that person?” Always locate the “president” in your negotiations.

3) Magical use of silence (this can be a powerful tool)Target:  “I am not going to pay for your service.”

You:     “You are not going to pay for my service.”

-Pause-

-Pause-

-Pause-

Target: “Yes, because you have terrible service. You guys are always late. The job is badly done. I don’t like this part of the job done…etc”

Many people dislike the awkward silence in conversations. They will do anything to fill up the silence. When they desperately try to find something to fill up the gap, they will elaborate on their decision. When they elaborate, they are revealing more information and you continue to probe again.

The ability to see from the other party’s perspective is perhaps the most important skill a skilled negotiator should have. You really have to think beyond yourself and put yourself into the other party’s shoes. Think from his perspective. What does he want? What are his underlying interests?

This is easier said than done. Identifying the other party’s interest is also probably the hardest thing to accomplish in a negotiation. Failing to disclose his interests is one of the cardinal sins in negotiation.

How do you discover interests?

Put yourself into the other party’s shoes. Analyze and inspect his stance. These are a few examples:

If you are negotiating with your boss for a promotion,

“Why does he not want to promote me?”

If you are negotiating with your husband on the venue of your dinner,

“Why does he not want this restaurant?”

If you are negotiating with your kids to study an extra hour,

“Why does he not want to study?”

If you are negotiating with your business partner on a deal,

“Why does he not want his concession?”

If you are negotiating with your landlord,

“Why does he want to increase the rent?”

Keep asking why. This will put you in his position and see from their perspectives. You will immediately have a clearer picture of their underlying interests. Try role-playing in your head or get a friend to help you with this. Imagine that you are the person you are negotiating with and negotiate against yourself. This is a very useful process in the preparation stage.

When you are in the actual negotiation, you should still ask him why he takes this specific position. Never assume! Asking him why will ensure that you did not make any wrong assumption of his interests in the preparation stage. Be very clear that you are asking him because you wish to find out more about his interests. And be really tactful when you ask why. Sometimes, it can come across as intrusive and even offensive.

Sometimes, we do get people who are liars. Consider how you will want to negotiate with liars. Is there a way we can deal with liars? We will discuss these in my future posts.

I can already hear some screams. Don’t panic!

Didn’t I say we should not be the first to open? Yes.

Didn’t I say there’s risk involved in being the first to open? Yes.

So what’s happening? Should we open first? Yes? No?

It all depends.

Note this:

Whether you should open or not, depends on the amount of information you have at hand

As a general rule of thumb, if you have no idea on the value of the things you are negotiating, never open. But if you have done your research or you are an expert in that industry, go ahead and open. There are many good reasons for opening.

Recall the experience I shared with you on my shopping trip in Thailand. Suppose I wanted to buy a hat. I will almost never buy at the first stall. Instead, I will shop around, bargain with a few stall-owners. After a few rounds of sweaty and bloody negotiations, I will have a good feel of their bottom-line. Armed with this information, I can now walk into any stall selling the same hat, and open with much confidence.

Opening first has the “anchoring effect”. Anchoring is a term coined by social psychologists.

According to Wikipedia, “anchoring and adjustment” is a psychological heuristic which influences the way people intuitively assess probabilities.

In layman’s term (negotiation setting), you will tend to negotiate around the range that was first opened. Opening first gives you the opportunity to anchor, allowing you to fix the range. Suppose I want to buy the hat at $30, I will open with a number that’s close to $30. Should you let the stall-owner first, he might open with an astronomical figure such as $50. With that, the whole negotiation will be fixed around the range of $50 and it’s harder to bring it down to $30.

Before you decide if you should open, think through if you have good knowledge of the value. Never rush to open. Preparation plays a huge part in opening.

In the next post, I will cover on HOW should you open.

There are plenty of negotiation experts who will tell you NEVER to open first. The main reason for not opening first is that the person you are negotiating with, might open with something that is above your expectation. There is always risk involved when you do open first. Many expert negotiators will scream “Just shutup!”. Let the other side open first then you can slowly correct his range.

How do you correct him? Let’s learn from the stall-owners in Thailand.

I was shopping at a flea market in Thailand, Bangkok. Whenever I try to open a price (be it too high or too low), the stall-owners will always give the same kind of response. They will immediately give a long “noooo…..”, complete with the shaking of head to indicate that the price is not right. Should you do the same? Yes! (but not in such a dramatic way)

In a negotiation, you should never be too agreeable to the initial opening of the person you are negotiating with. There are many reasons for this and its mainly psychological. If you agree too early in the negotiation, your target will feel that he’s being ripped off or that you stand to gain too much. He will definitely try to hit back using other channels.

Never say “Yes!” too early, and never open!

In the meantime, think about when is a good opportunity to open? Can you be in an advantageous position if you open first?

Yahooooo! Here we go!

The brand new TheNegotiationGuru.com! Look around and let me know what you think.