The Negotiation Guru

In my previous post, I have described to you the Socratic Method to question and influence the other party. Let me use an example to illustrate to you:

Suppose you had to negotiate with your colleague about the expansion strategy my company should be taking. Let just say he had supported expansion plan A. You would need to first decide on a strategy and try to get him to agree to my proposal. This would require him to admit that his proposal was not feasible and had little chance of success. Definitely not an easy feat.

Opposing him and refusing his proposal directly will send a very strong signal to him. You should refrain from revealing your true intentions. Began by agreeing with him on his proposal and encouraged him to elaborate more. Like Socrates, start asking questions which seemingly skirted the main topic. This way, you could slowly catch them in their inconsistencies.

Assuming let’s just say that his main point was that his expansion plan would bring the company global, bringing in more clients from all over the world. It would result in fast expansion of the company. Get them committed to what they had said by rephrasing.

“So you are saying that going with the global expansion plan will bring in more clients for the company? Am I right on this?”

From there, start finding weaknesses in his claim.

“Do you know of any similar companies which had taken on such expansion plans before?”

“What are the costs for executing such a grand plan?”

“Do you know if other companies which expanded took this route we have on our table now?” (notice i use “we”, this sends a subtle signal to him that you agree with his plan and will help him open up to you.”

“Did this work for our company previously?”

“What are the concerns that we have to look into before we take on this plan?”

“Are there any pitfalls we should avoid?”

“How much do we have to invest and is the ROI worth it at this stage?”

“Will we bring in new problems?”

“What would happen if we execute this plan differently?”

“How would you have ensured the success of this plan?”

The final attack:
“Is it right to execute such a plan that has so much risks involved with no guarantee of success?”

What I am really trying to do is to find weak points in this proposal. Framing it in such a way that you would hope his plan to succeed as much as he did. Having so many weak points built up at the end of the discussion, adopting his proposal might not seem feasible anymore. Ultimately, you are bringing him from Point A to Point B to Point C.

We are not trying to trick another person into believing something else. You believed that his plan was flawed and you wanted him to communicate that to him. Hitting him face on would make him defensive and reactive. Using the Socratic Method would help open him up to possibilities that he might be wrong.

Remember: Ask questions that will navigate the other party towards a position you want him to be.

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Jens Thang
Negotiation Skills for Everyone

Email: jens@thenegotiationguru.com

The problem with many negotiators is that they do not direct their questions towards a certain purpose. The art of questioning has to be strategic. To be truly prepared, you need to put some thoughts and time into the type of questions you direct to the other party. Work out the questions with a strategic plan in mind.

Many negotiators believe that by proving inconsistency in the other party is strategic and tactical. They cannot be further from being strategic. When you show that you are trying to provoke them in your questions, you turn on the defensive mode of the other party. You put them on guard and that is not something you want to achieve during a negotiation. As the other party starts to get defensive and closes up to any form of conversation, the negotiation will go nowhere.

The true art is to make the other party open up to you. Lower their defense wall. And attack from a direction they did not anticipate.

Let me introduce the Socratic Method

This wonderful method requires you to understand both the viewpoint of the other party and HOW he came to that conclusion. By truly understanding the other party’s position, you will be able to identify the weak areas and start ripping them apart in a subtle way.

How do you apply the Socratic Method to negotiation?

First, begin by letting the other party express his interest and his decision. Ask him how he would like the negotiation to be resolved. Appear to agree with him at first and acknowledge whatever they are saying to be valid.

Start asking questions that presumably fringed on the main topic of the negotiation, but attacked the weak points into everything the other party has put out during the initial stage of the negotiation.

What you are trying to achieve, is not only to influence the other party to change his initial stand on the issue. But also make it appear to be his own idea.

With this, you truly convince.

You can still hold on to your initial viewpoint but the key is really to act like others. People do not like to believe that they are wrong. They always think that their decision is the best and they strongly believe in it. By proposing a challenge to their belief, you are attacking their ego. Again, you want them to tear down their own position and not build a wall around it.

With this Socratic Method, you will be able to question anyone’s fundamental beliefs in any topic. And of course, essential in negotiations.

Think about how you would apply the Socratic Method for your next negotiation. Email me your thoughts and results. We will evaluate them together.

Remember: Never challenge the other party’s position and viewpoint. Apply the Socratic Method to tear him down.

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Jens Thang
Negotiation Skills for Everyone

Email: jens@thenegotiationguru.com

Confidence

The ability to control yourself and to control the way you negotiate will drastically affect the results of your negotiation. You will need to think and act confidence in order to be a strong negotiator. Show that you know what you are talking about. Let them feel that you are in charge of the situation and you have the ability to influence the outcome of the negotiation. The way you carry yourself speaks loudly of how confident you are as a negotiator.

According to Dr Brian Roet, author of The Confidence to be Yourself, there are 3 ways to have more self-confidence:

1) Know yourself

Who are you?

What are your dominant personality traits?

What kind of person you are?

What motivates you?

What saddens you?

What frightens you?

What makes you happy?

2) Like yourself

What do you like most about yourself?

What do you dislike most about yourself?

What do you like most about others?

What do you dislike most about others?

3) Accept yourself

Tell yourself that no matter what happens in the outcome of the negotiation, you will still be the person before the negotiation.

You should still be the same person before, during and after the negotiation.

Here are my 20 ways to build your own confidence during a negotiation:

1) Negotiate in an assertive manner

2) Believe in yourself

3) Take charge of your own action

4) Speak in a calm manner when negotiating

5) Listen during a negotiation

6) Remain flexible throughout the negotiation process without compromising your own goals

7) Self-assessment and self-evaluation

8). Accept criticism in a graceful manner

9) Learn from own negotiation mistakes (sometimes others)

10) Understand that you have the ability to influence the other party

11) Understand that you have the ability to influence the outcome of the negotiation

12) Accept ownership of your own negotiation

13) Be kind to yourself. Don’t put yourself down too much if you do not achieve the negotiation results you set to achieve

14) Be conscious of the other party’s emotions and feelings

15) Be helpful. See negotiation as a process to help improve both sides, not only to win

16) Be honest with your dealing and the things you say during a negotiation

17) Walk tall

18) See negotiation as a series of challenges

19) Do not be too quick to judge

20) Accept that negotiation is dynamic. Change is common during a negotiation

Remember: To be a strong negotiator, be confident!

Send me an email with the word “I need confidence!” in the subject line, I will share more insights with you.

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Jens Thang
Negotiation Skills for Everyone

Email: jens@thenegotiationguru.com

1) Ask questions

2) Give acknowledgments

3) Shut-up

4) Paraphrase

5) Follow-up

6) Positive body language

7) Keep nodding your head

8). Say lots of “mm”s

9) Take notes

10) Allow him to finish his sentences

11) Keep an open mind

12) Shut-up (again!)

13) Give full attention

14) Give feedback

15) Don’t get distracted by surroundings

16) Don’t get distracted by your inner thoughts

17) Listen with your face

18) Maintain eye contact

19) Avoid getting emotionally involved

20) Don’t think of what you are going to say

21) Lean forward

22) Summarize what you have heard

23) Empathy, Empathy, Empathy

24) Be genuinely interested

25) Put yourself in his shoes

26) Respect everything he has to say

27) Turn off your cellphone

28) Remove your watch

29) Don’t look at the clock

30) Encourage him to elaborate

31) Ask meaningful questions

32) Shut-up

33) Show that you are open to what he has to say

34) Speak at the same volume

35) Speak at the same rate

36) Be patient

37) Be comfortable with pauses

38) Give reassurance to the other party

39) Accept the fact that everyone has her own style of expression

40) Ask empowering questions

41) Did I say “Shut-up”?

42) Say “Uh-huhs”

43) Smile

43) Agree with what the speaker has to say

44) Do everything I have listed in MODERATION (except for the “shut-up”s)

I challenge you to try these in your next negotiation or even your next conversation with anyone. Email me after you have done so.

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Jens Thang
Negotiation Skills for Everyone

Email: jens@thenegotiationguru.com

Listening is the best skill you can learn to do better in negotiations. It is the best way to learn more about the other party. It’s not surprising that there are many people with poor listening skills. Everyone wants others to listen to them. This validates their self-worth.

Learning more about the other party you are negotiating with will drastically improve the results of your negotiations.

How to listen?

1) Question

There’s a huge difference between hearing and listening. For the latter, you have TO BE THERE. You must take a more proactive stance to listening. Throw questions. After you have asked a question, listen. Don’t say another word. Give the other party more chances to speak. The more they talk, the more they will reveal information. In turn, the better your results.

“What are the reasons for requesting for this?”

“What is the best way to go about doing to this?”

“When do you think we should sign the deal?”

“How is it possible for us to come to an agreement?”

“What is holding you back?”

Listen to what the other party has to say and ask questions which will reveal more information.

2) Paraphrase

Paraphrasing is to check your understanding. It means that you express what you understand from the conversation using your own words. When you paraphrased, you let the other party know that you are listening. If you show that you have taken in whatever she has said, you will be more successful in gaining her trust. This also increase the chances of her listening to what you have to say.

“Just to make sure I get you right on this…”

“If i’m not wrong, you are trying to say that…”

“Correct me if i’m wrong…”

3) Acknowledge

To acknowledge means to express your understanding of the other party’s emotion. Negotiation can be an emotional affair. When someone negotiates, she is constantly looking out for validation. In her mind, she might be thinking, “Is my opening okay?” “Do they think that my concern is trivial?” “Do they think that I’m hard to deal with?” “Do they think that I’m demanding?”

To move on in a negotiation, we have to validate the other party’s emotions.

“Sounds like you are very concerned with the delivery…”

“It occurred to me that you are unhappy with the terms…”

“I can understand why you are not happy with this condition…”

“I can see the reason you should be upset..”

“I am hearing what you say, you are disappointed because…”

Remember: 3 steps to listen for more information: Question, Paraphrase, Acknowledge

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Jens Thang
Negotiation Skills for Everyone

Email: jens@thenegotiationguru.com

When I stepped into the office this morning, my colleague was screaming and arguing with the bank rep over the phone. Later I found out that he was actually trying to negotiate to get a charge of $40 waived. He got the charge because of an accident overdraft.

Later I found out from him that he had been calling his bank 3 days in a row. A bank manager promised to waive off his charge when he called on the first day. However, he was still charged $40 by the bank. He probably made about 10 calls to the customer service department and had spoken to more than 10 bank reps and managers. He was really persistent.

“So, do you think it’s worth the effort just trying to get your $40 back?”

“It’s a matter of principle.”

Boy, i was thrown off. He was dead serious about getting his money back. I observed all the calls he made and noted down all the mistakes he did. Finally, I decided to help him out a little.

“Can I make a suggestion?”

“Sure, help me if you can!”

“Call them up again and ask for the customer retention department.”

“What’s that? Can I find the number online?”

He went online to search for the number to the customer retention department.

The department is probably so exclusive (only to serious problematic clients of the banks) that it is not going to be easy to reach them. So I told him to call up the customer service department and asked to be referred to the Customer Retention Department. He did.

”Hi, I am really unhappy with the service that the bank is providing. Can you refer me to the Customer Retention Department?”

“Sir, may I ask the reason?”

He went on the explain for 2 minutes and insisted on getting referred to the Customer Retention Department.

The customer service manager finally gave up and said these words to him, “You know the game, don’t you?”

My friend’s face lit up immediately. He knew he was winning the game, turned over and gave me a thumb up.

Remember: If the customer service department fails you, turn to the Customer Retention Department. And, know your game. =)

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Jens Thang
Negotiation Skills for Everyone

Email: jens@thenegotiationguru.com

Tim Ferris wrote a blog entry on negotiations. He quoted a portion from filmmaker, Bob Compton. This is an interesting observation of how negotiations are being conducted in India.

This is not to say that every Indian negotiates like this.

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In India, every transaction — EVERY transaction — is negotiated. Merchandise, cab fare, restaurant bills, wedding doweries — the list is endless.As our guide Vishnu explained, “In India, we bargain to the level of the individual vegetable purchase.”

While awkward and uncomfortable to most Americans, that level of negotiating can be quite valuable.Hotmail founder Sabeer Bhatia, a CA transplant from Bangalore, credited the bargaining skills he learned in vegetable markets at home for getting Microsoft to push its acquisition price for his company from $160 million to $400 million. Bill Gates’ eye teeth were floating in tea with that deal.

Here are a few rules for bargaining on the buy-side when in India:

Rule #1 - The true price of any item is what you pay — There are no suggested retail prices in India. Nothing is labeled, so it pays to talk with several vendors before making a significant purchase.

Rule # 2 - Try for 70% off — Don’t accept less than 30%

Rule # 3 - Make them show lots of merchandise — If it is a rug merchant, you want the demo guys sweating profusely before you make your first offer. Get the vendor to “invest” in the transaction — emotion, time and energy.

Rule # 4 - Offer on one item at a time – If you plan to buy a couple things DON’T let on at the outset. Act like you intend to buy only one item, if that much. Get the seller to give you prices on each item; play one item off another to show you are looking for the lower price point.

Rule # 5 - Wait for the pad of paper — Every Indian sales person has a pad of paper and a pencil that they pull out when the bargaining gets a bit more serious. Though they write down the price for an item, this is only the starting point - remember rule #2.

Rule # 6 - Say “TOO HIGH”, a lot – Don’t even start negotiating until the salesman has scratched through the initial price and lowered it at least twice. I found that simply staring in silence at the pad of paper for a long time would result in the vendor cutting the price.

Rule # 7 - Imply a bundled purchase — OK, now that the price has been cut 25-30%, ask the salesman what deal he would give you if you buy two items. Expect 5% off. Ask for three items; get another 5%. Then add a very expensive 4th item — one which you do not intend to buy. This will excite the vendor and he will do a bunch of calculations which you will be unable to follow. The price will come down for the expensive item as well as for the other items you intend to buy. Lock those prices and drop the expensive item.

At this point, you should have been able to shave close to 50% off the initial price. Most Americans generally are satisfied at this point and close the deal.

One final point - no matter what price you pay — if the sales guy is smiling when you leave — guess who won…

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Jens: Well, this is really a stereotype.

I am writing an article on the rules of Chinese negotiators. Feel free to email me your experience.

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Jens Thang
Negotiation Skills for Everyone

Email: jens@thenegotiationguru.com

This can cost you a lot of money if you fail to understand all the terms and conditions. Always make sure that all the terms are properly negotiated before the end of a negotiation. Do not take things for granted.

I recently learned how important it is to negotiate all the terms and have the terms documented. Do not rely on mutual trust.

The setup

I had to buy a car to travel to work and decided to buy it from a friend. Let’s call him Jerry. The car was not in a good condition but Jerry had to sell it off. Deciding to do Jerry a favor, I agreed to buy the car from him.

There were 2 rounds of negotiation for the car.

During the 1^st round, Jerry offered a price of X amt and he will pay for the transferal fee of title deed. As X amt was not justifiable due to the condition of the car, I decided to negotiate with him two weeks later.

For the 2^nd round, Jerry decided to drop the price a little. I was still a little hesitant. Many friends discouraged me from buying the car. Since I gave him my word earlier, I decided not to negotiate further.

On the day of the sale, he said to me “Jens, you are paying for the transferal fee.”

That took me by surprise. I was living under the impression that he was paying for the transferal fee.

His defense line was, “since it was not mentioned during the 2^nd round of negotiation, whatever that was negotiated during the 1^st round would not be valid.”

He was right. I was the one who made the mistake of not making sure the condition would still be valid after the price reduction. My assumption was wrong.

The transferal fee was equivalent to the reduction in price he gave in the 2^nd round. At the end of the day, I was paying the same amount.

This entire transaction was based on relationship and trust. I did not feel the need to document everything. That was my fatal mistake.

Point to note: No matter who you are negotiating with, always make sure every term is made clear and documented. This can save you much trouble and even the relationship. The person you are negotiating with might not treasure the relationship as much as you do. Never take things for granted.

Remember: Always negotiate every term and condition. Document all commitments.

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Jens Thang
Negotiation Skills for Everyone

Email: jens@thenegotiationguru.com

Before you step into the negotiating room, you have to consider many things. One of the things that you should consider is “what other options do I have?” Answering this question will alter the way you negotiate with the other party.

All skilled negotiators know their objectives before they start negotiating. They also have a bottom-line ready in case they need to walk away from the deal.

Apart from having your objectives and bottom-line, you need to consider your alternatives.

“What will I lose if there’s no deal?”

“Is there a better option?”

“Do I have another offer?”

“Can I get this from another firm?”

Think through all the possible alternatives that you can have. There are usually more alternatives if you look hard enough. One of the common mistakes a negotiator make is to think that they have everything to lose if there’s no deal. This will change the way you negotiate. Be really careful of this.

Never be too focused on trying to close the deal.

Imagine you have to shop for a birthday present for your best friend. You decided to get him a red tie.

Now there are 2 scenarios:

1) There’s only 1 shop in this world which sells red ties

2) There are 10 shops in your neighborhood that sell red ties

The way you negotiate in the 2 different scenarios will be vastly different. If you think that there’s only 1 shop in this world that sells red ties, you probably haven’t looked hard enough. There’s probably another shop that sells red tie just round the corner.

Having alternatives will improve your leverage when you negotiate.

Remember: Always have alternatives before you start negotiating.————–

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Jens Thang
Negotiation Skills for Everyone

Email: jens@thenegotiationguru.com

Some negotiators are prone to using jargons while negotiating. Lawyers are very guilty of this. They use such language to assume the position of being more superior. Do not feel intimidated by their language. Instead, neutralize it. Play it to your advantage.

Have you ever chatted with a scientist about the subject he’s a guru in? I have.

Dr. Lawrence is a renowned neuroscientist. His research is at the forefront of neuroscience. I had an opportunity to have a chat with him.

I asked him about the research that he was doing. That was probably the last thing I should have done if I wanted to build rapport with him. I was lost after the first 5 words he spoke about his research. He was giving me so much technical jargons that I didn’t understand. It was not rocket-science but neuroscience was not any simpler. I felt pressurized and I definitely felt like an idiot.

This is very common even in negotiations. To appear more superior to you, the other party might start to throw in jargons that you might be unfamiliar with. Lawyers might spell out some laws which you do not understand. This can be intimidating. People are afraid to appear ignorant. And because they are afraid to look stupid, they do not seek clarification.

If you do not understand, ask!

Alternatively, you can say “I am not sure of what you have just said. Can you explain it to me in simpler terms?”

Do not be afraid to ask for clarifications. If you feel that the other party is just using the language tactic to gain leverage, call out the tactic.

“If we want to have a good deal, I believe it is important for both sides to understand each other properly. I will appreciate if you can explain whatever you have just said to me in a way that I can understand.”

Remember: Do not be intimidated by the language tactic. Reverse it.

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Jens Thang
Negotiation Skills for Everyone

Email: jens@thenegotiationguru.com

Definitely! You can have too much power when it comes to negotiation. This happens when you know that the other party has much more to lose should there be no deal. So, can having too much power be a bad thing? Yes.

When people have too much power, they tend to be arrogant. Your arrogance will show in the way you negotiate. You want to make the other party feel that a good relationship is being built in the process of negotiation. You should not make her feel that she is being bullied into closing the deal with you. Let the other party leave the negotiating table feeling victorious.

The other party will appreciate that you do not abuse your power. In return, there might be a higher chance of her returning the favor to you. If you do follow the law of reciprocity, you will understand that it pays to be nice (sometimes!). Believe in Karma.

In a business negotiation, you want to aim for a healthy working relationship.

Having too much power can cause you to underestimate the other party. Power is a perception concept. How much power each other has, depends on how the other party perceive them to have.

You might think that the other party is weak and therefore underestimate his power. This can be dangerous. Never underestimate the party you are negotiating with. The power balance in negotiation is dynamic. It changes every single minute. I will discuss the dynamism in the negotiation process in my later posts.

Remember: Even when you have a lot of negotiating power, do not abuse it.

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Jens Thang
Unleash The Negotiation Guru In You!

Email: jens@thenegotiationguru.com