The Negotiation Guru

“Mistakes are the portals of discovery.” - James Joyce

Mistakes are common in any negotiation. Learning to identify mistakes and avoiding these mistakes in your future negotiation will dramatically improve the success of your negotiation. If something did not work out as intended in your negotiation, there are still many ways of managing your negotiation to make it a success.

Here are 10 mistakes which you should avoid in your negotiations:

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“I don’t even call it violence when it’s in self defense; I call it intelligence.”
- Malcolm X

Experienced negotiators know hundreds of tactics and strategies. However, when under pressure they will instinctly do whatever that works. In a real world negotiation situation, unethical tactics are very common. These tactics come in all direction and you won’t have time to think.

The skilled negotiator is able to deal with unethical tactics quickly with high level of control. With dedication and consistency, we can slowly learn how to deal with unethical tactics.

Here are 5 ways to deal with unethical tactics:

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Hi John,

I agree that sometimes we do find that we have difficulty getting people to negotiate. They just seems to be disinterested in negotiating and have previously refused to negotiate. Things can get quite complex if not handled properly.

You must be thinking, “How do I negotiate with her if I cannot even get her to talk about the issue?”

How do you get people to negotiate?

First, look at the reasons why that person does not wish to negotiate.

Investigate from all areas and all perspectives:

Does she feel there is no need to negotiate?
Is she offended by something?
Is she concerned about some issue?
Maybe she is not ready to negotiate?
Could it be because she dislikes negotiation?

After you have tried to find out the cause for her refusal to negotiate, you can then truly understand from her point of view. Some people just dislikes negotiation. If this is so, maybe use another term to replace negotiation.

“Let’s discuss this issue.”
“We need to talk about this.”
“I am concerned that we are not progressing.”
“Is there something that you like to talk about with regards to this issue?”
“When is a good time for us to discuss this?”

There are other ways to get her to negotiate with you.

1) Find someone close as your ally

Get that person to talk to her. She could be refusing to talk to you because of the kind of relationship she has with you. She could be uncomfortable negotiating with you alone. Get someone who is close to her or at least someone neutral to talk to her .

2) Lure them in with opportunities

Make it really tempting for them to come to the negotiating table.

“Hey, I found a good solution to this problem!”
“If we can discuss this, we will be able to better our relationship!”

Create more irresistible offers to entice her.

3) Arrange the situation such that she has more to lose if she drags on

Some negotiation experts use the phrase: take away their BATNA.

“This issue at hand is frustrating me, I am not sure if I am willing to wait to resolve this.” (beware of the credibility issue of a threat)
“If you are not going to talk about this, I will move forward with my decision.”

Taking away her BATNA does not necessary means threatening or blackmailing. It is more credible if you are able to do something to change the situation and not just SAY something.

4) Wait, wait and wait

If all else fails, and there is nothing much you can do, you just have to wait.

Maybe she feels that it is not the right time to negotiate yet.
Maybe she has some issues at hand.
Maybe she needs more time.
Maybe she does not think negotiation is necessary.

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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

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

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

“Well, I really like you have proposed but I need to discuss this with my boss first.”

This is probably the most irritating thing to hear after you have spent hours negotiating.

“After I have spent so many hours negotiating with you, you are telling me you cannot make a decision?”

Of course you should not say this out. This will sound too hostile and offensive. But I won’t stop you for screaming this in your head or feel the urge to land a punch right in his face. Just make sure you still carry a smile! No, don’t punch him, yet.

Negotiation guru Richard Shell calls this “Fake Authority Ploys”. He believes that people lie about the authority they have when they do not. Or people lie about the authority they do not have when they actually do. Confusing?

Imagine this, when you are trying to get a discount on an item:

“You know what, my boss says no to such a term. But I am going to give it to you. I am making this exception just for you. Let’s keep this between me and you.”

“I can’t do this. I have to consult my boss first. I will do that before I get back to you.”

Perhaps both are lies. You will never know. So what should you do? Ask!

“Maybe I should talk to your boss directly since you are not able to make the decision.”

“Who is the decision maker in this negotiation? I would prefer to negotiate with him directly since you are not able to make the decision.”

Remember: Always find out who’s the decision maker before you negotiate.

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Jens Thang
Unleash The Negotiation Guru In You!

Sometimes we do have to negotiate people who are very competitive. They are always out to win. Winning to them, is their life. They cannot accept anything less than victory.I still remember an incident which I had to negotiate with a client of mine.

Let’s call him Teddy.

Teddy is a tempestuous guy. He gets angry at the slightest thing. I am always very aware of him when I deal with him. He’s definitely a good client to keep as I always get referral businesses from him.

I was negotiating a deal that I agreed to verbally but had to pull out due to personal commitments. Teddy is definitely not an easy guy to negotiate with. I had fun anyway.

“Teddy, I won’t be able to make it for this gig on Sat. Can you get someone to replace me?”

He started to get emotional.

“Jens, I have always given you businesses. Now you are playing me out. You have no respect for me…etc”.

I zoned out immediately. Thinking back, I shouldn’t have. A good negotiator should never zone out when the other party is speaking.

This is my reply to him.

“Teddy, I understand that you are under this pressure because this client is really huge. And you want to maintain a good relationship with him. The deadline must be putting a lot of pressure on you. I really can’t make it this Saturday. It’s totally my fault. Tell you what, I will find a substitute for me.”

Help others get what they want, you will get what you want

These are the 3 things I did:

1) Never put them down

Let them walk away a winner, not a loser. Some really competitive people want to win in every negotiation or argument. You have to let them win (or at least not lose). By putting them down will only ruin the relationship between you and him. He might even find some other channels to get back. This is not healthy. Learn to let him feel like he’s the winner so that he can save some skin.

2) Probe for the reasons why he’s behaving this way

More often than not, people behave in a certain way for many reasons. Instead of talking about the deal, I talked about him. I asked myself, “What’s the main reason that Teddy is behaving this way?” I soon realized that it could be because he was under a lot of pressure to make sure things went smoothly.

3) Give acknowledgments

After you have identified the key reasons why he’s behaving this way, acknowledge it.

“I understand that you are under a lot of pressure.” People are less than willing to admit that they are under a lot of pressure. This is especially so for males. They do not wish to appear weak. Subtly let him know that it’s alright to feel that way. He will feel that you understand his position and this puts you in a better position to negotiate with him.

4) Make suggestions

If possible, try to suggest an alternative. One of the key skills that a negotiator can have is to be creative and generate alternatives for a deal. I made a proposal towards the end that will solve his problem, take some pressure off him and allow me to get what I want. This is another win-win situation.

Remember: Let the other party leave the negotiating table feeling victorious.

This is my favorite tactic. I like to see the drama. Some of them are so bad at acting that they suck at deploying this good cop/bad cop tactic.

Have you gotten two people across the negotiating table with 2 very different perspectives?

The “good cop” starts off with a very friendly tone and tries to build rapport with you. He is so nice that you can almost feel that he is trying to negotiate FOR you and not AGAINST you.

“Yes, what you have proposed is really brilliant. I think my company should agree with your proposal.”

Just when you feel that this deal is going somewhere, a “bad cop” starts to interject.

“No! This is too outrageous. We can’t do this deal. Our company will make a huge loss if we agree to these terms.”

He seemingly tries to convince the “good cop” that it is a really bad deal. What the “bad cop” is trying to do is to lower your expectations. They are trying to anchor you. Be very aware when the other party starts to anchor you. This can also happen when they start to make extreme offers.

This movie drama starts to go back and forth. The good cop and bad cop start to disagree with each other. You get confused and start to lose focus. What should you do?

Call out this tactic to them.

“It seems to me that one of you is playing the angel and the other guy the devil. You know, I cannot negotiate with 2 people at the same time. So who is the final decision maker in this negotiation? Who has more authority?”

Find the decision maker and deal with him alone. You often get consultants, accountants and lawyers alongside with the person you are negotiating with. Ignore them. Just deal with the “big guy”. Request that you want to negotiate this alone with the decision maker.

“I like to negotiate this with you in private, without the white noise in the background.”

Remember: Call out the tactic. Deal directly with the decision maker only.

What if you are face with such a goat? The nibbler attacks just when you are ready to close the deal. He will start asking for modest things to be included in the deal right before the deal is done. You can’t help but feel the urge to grant him his little demands.

“Can you add in this tie together with the suit?”

“Can you give me three years free warranty together with his?”

“There will be free delivery to my place right?”

You know that nibblers are attacking when they look for additional stuff to be included in the deal. They demand for something just before the agreement is being signed. Some people are really good at that. Just when you think you are reaching the finishing line, they throw you off by trying to squeeze some stuff out of you. You do not hope to see this deal go down the drains or strain the relationship with the other party, you begin to say yes.

Stop for a moment!

Why are you allowing this to happen? You must resist the temptation to close the deal and in the process, agree to every concession they ask for.

How to deal with such a situation?

1) Be very specific with the terms and clauses.

You must be very clear and very sure of what is included in the deal and what is not. Refuse to give the concession. Learn to say no to nibbling. Being assertive will prevent such a situation. When the other party has the leverage, you will be more prone to succumb to such nibbling acts.

2) Hold something back to give (if they start nibbling)

This is a popular tactic by retail stores. In order to retaliate against such requests by the consumers, they always have little free gifts prepared. I was trying to nibble before I pass them my credit card. I decided to try to ask for additional things to be included before I make the purchase.

“Will you be able to add this pair of socks together with my shoes? I need black socks.”

“Sir, we can’t do that. But we can give you a little brush to shine your shoes.”

There was no mention of the brush before I nibbled. This is probably the strategy of the shoe store to ward off nibblers like me. Both parties end up satisfied. I was glad I got the free brush, and they were glad they got the business.

3) If-Then tactic

The “If-Then” tactic is a very well-known tactic. Everyone deploys this tactic. When the other party starts to nibble, always try to trade for something.

“Will you add 3 years warranty to this?”

“Sir, we can do that. But you will have to purchase a 1 year warranty and we give you free upgrade to 3 years. How’s that for you?”

This almost always works! First, you can dissuade them of trying to nibble further. Second, you can get additional business.

Remember: Never succumb to nibbling.

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Jens Thang
Unleash The Negotiation Guru In You!

We do get unrealistic offers from the other party. If you are the seller, your buyer will offer a price that is way too low your expectation. If you are the buyer, your seller will probably try to sell you at a price that is totally out of your range. You start to get offended by the outrageous offer the other party shoots. How do you deal with this?

We must learn that by getting angry with what the other party offers is not worth it. It will affect the relationship you have with him and future dealings. You want to still preserve the good relationship with him. Separate the person from his proposal. It is not the person you disagree with. It is his proposal that you do not agree. Seeing the person and the proposal as two separate entities will help you deal better with the other party.

This is what you can do:

1) Call out the tactic

By calling out the tactic, you can be sure that the other party will start to become defensive.“I was hoping that we have a healthy dealing here but the extreme offer tactic that you are using just upsets me. It sounds like you are not interested in closing this deal.”2) Ask for justificationAlways ask for justification! Even if they offer something that is within your range, proceed to ask for justification. When people have to justify their own stand, they start to examine their own offer. Sometimes, you can get them to talk themselves out of their initial offer.“How did you come to this figure?”“Is there a reason why you are offering this?”

3) Flinch!

Show that you are surprised by his offer. The other party might sometimes be ashamed by his outrageous offer. You will know that he is ashamed when he starts to retaliate quickly by saying “Oh…so what do you offer? Give me a good one? I will see if I can adjust my offer.” By saying this, the other party has given away his game. It shows that he does not find his own offer convincing enough since he is so willing to adjust his offer.

You will have to play his game. The other party is trying to anchor you. Be very aware of this. Let them know that they have to adjust their expectation in order to close the deal with you. Make relationship the most important factor in your negotiations.

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Jens Thang
Unleash The Negotiation Guru In You!

There are some people who are so driven by the need for acceptance by others that in the process, they lose their identity. Fear of rejection can result in irrational behavior and thinking.

I have heard so many people say before a negotiation, “What if they do not like my offer? Will I offend them if I offer them this?” Guess what, the results usually turn out bad.

People who are afraid of rejection are usually not assertive during negotiations. They tend to speak up lesser and exhibit low confidence. Although some might have a tendency to exhibit aggressive behavior to mask their insecurity. They become so inflexible and rigid which is antithesis of what a good negotiator should be.

Face it, rejection is part of life.

You can never run away from rejection. All of us can handle rejection better than we believe we could. Do not let fear of rejection get in your way of negotiating a good deal. You should not let a few “no” get in your way of success. Never take a “no” personally. The other party is saying no what to you have offered, it has nothing to do with you as a person.

There can be many reasons why the other party might say no to your offer. This is your chance to probe. Get more information from him. Then get him to propose an alternative.

“Why do you not agree to this term?”

“Is there something that’s keeping you from saying no?”

“Will you be able to make the decision? If not, is there anyone that I can talk to?”

“What do you suggest that is fair to both sides?”

“Are you suggesting that we should …”

Don’t get too discouraged by rejection.

Maybe the time is not right. Maybe the proposal you gave was not good. Maybe you did not justify your offer. Maybe the concession you are giving is not their wants. Maybe they have other interests. Maybe they need something else from you.

Maybe..maybe…maybe…the list goes on and on…

There are just too many reasons for them to say no. Instead of behaving in a self-defeating way, deal with it. Probe more! Negotiate more!

“I think all great innovations are built on rejections” - Louis Ferdinard Celine

“I think all great deals are built on rejections” - Jens Thang

Remember: Each “no” is one step closer to negotiating the best deal in your life.

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Jens Thang
Unleash The Negotiation Guru In You!

Many communication gurus have suggested that empathy is a very useful tool to try to persuade someone. We use empathy all the time. Its is a powerful communication tool that is underused and often misunderstood.

According to dictionary.com, empathy is identification with and understanding of another’s situation, feelings, and motives.

It is the process of understanding and appreciating of the other party’s emotions and positions. To put in simpler terms, it means to “put yourself into his/her shoes”.

These are 4 steps which you can take:

1) You must first be aware of the other party’s emotions. How is he feeling about the deal? Angry? Sad? Disappointed?

2) State your own perception of that emotion. “I think you are upset that we are not willing to cut the price…”

3) Make that emotion/feeling legitimate. “I can totally understand why you are upset…”

4) Give him affirmations of your cooperation. “I am definitely devoted to working with you and making sure this deal will work out. Let’s see how we can help each other to achieve our goals.”

Instantly, you will be able to build rapport and trust with the party you are negotiating with. In a relationship-based negotiation, empathy is a very important tool to use.

Are you using enough of it?

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Jens Thang
Unleash The Negotiation Guru In You!

Today, my friend David shared with me how he negotiated against his credit card company. He received a letter from his bank two days ago with an additional charge of $160 after he supposedly breached a clause of theirs. He was totally unaware of this clause and decided to make a trip down to the bank.

The lady who attended to him was really rude. She would not budge no matter how hard he tried to get the charge waived off. He decided to take another approach.

“Has the bank ever made an exception to cases like this?”

“No, sir.”

“Why?”

“It’s written very clearly in the contract that if you…”

“I was totally unaware of the fine prints. The banker whom i opened my account with did not warn me of this”

“Well, I can’t really help you in that.”

“Do you think this qualify as a potential fraud case?”

“Eh…”

-Long Pause-

“Is there someone I can talk to regarding this case? This is so unethical!”

“I can check if my manager is around.”

5 mins later, she returned.

“Alright, I will make an exception for you this time round.”

Bingo!

Notice how my friend used some of the negotiation tools to save $160? He did it with absolute style without burning any bridges or hurting any relationships.

Update: He decided to close his bank account after the charge was waived. Well…

Recently, I went to a consulting workshop conducted by Wharton school. One of the speakers from a prestigious consulting company said “I always take notes during meetings.” The audience laughed. He went on to explain why note-taking is important. This is the same for negotiations.

Note-taking gives you clarity. When you physically write down the key points during negotiations, you will be able to reflect on some of the important points that your target has revealed. In a negotiation, both parties usually have more than one interest. Listing out clearly on your notepad the interests that your target has can be used as a tool as well. You can go on and say “Let me see if I understand you correctly. You wanted a good price, after-sales service, technical support, quality products and speed-to-market.” Your target will appreciate that you are clear with what he wants. From there, you have a clear idea of his wants and can go on to work on how to negotiate a win-win deal.

This can also be used to prevent the other party from going back on their words. This is a consistency tool to be used so to keep your target committed. Very often, you find the other party changing his mind after a few days. The negotiation has to go back to square one because his interests are now totally different from what was initially discussed. To prevent this, you can use your notes as a consistency tool.

“I have it written that you mentioned in the last meeting that you wanted a good price, after-sales service… Is that still right?”

If you want to appear slightly more aggressive, you can add that:

“I believe that we can have a good deal. If your interests are unclear and change from day-to-day, I am afraid we won’t have a mutually beneficial outcome. Let me know after you have discussed with your team, we will resume negotiation then.”

This is a powerful tool. People are afraid of appearing inconsistent. The consistency principle works on everyone. I will elaborate on the consistency principle in my future posts.

Remember to take notes when you negotiate.