The Negotiation Guru

“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.

—————–
Jens Thang
Negotiation Skills for Everyone

Email: jens@thenegotiationguru.com

This is a true example of how we can learn from everyone and everything.

Here’s the story:

There were 3 blind mice living in the Cat city. One day, the friendly cat, Kathy, decided to play a trick on the 3 blind mice. She took the 3 blind mice to visit an elephant in the zoo.

She took the first blind mice to the elephant trunk and let him feel it.

Then she took the second blind mice to the elephant leg, and the third to the tail.

As the 3 blind mice grew up not seeing an elephant before, they were asked to guess what is an elephant.

1st mice: “It is a tube. Something like a vacuum cleaner.”

2nd mice: “What? You must be crazy. It is a tree trunk!”

3rd mice: “Both of you are wrong! It is a rope.”

They started fighting with each other. Kathy was delighted with the trick she played on them.

What’s the moral of the story? (eek…)

Different people have different perspectives in life. Their perspectives are determined by the experience they had. We all have a tendency to delude ourselves into believing what we want to believe. Our minds have many different ways of mapping different possibilities even to a single event.

How can this be applied to negotiation?

Sometimes during a negotiation, both parties have different perspectives on a single issue. Many negotiation come to an impasse simply because they cannot see eye to eye on certain things.

From the 3 blind mice story, we learn that people might not see something the way you see it.

We have to be open to other opinions.
Listen to them.
Try to see where they are coming from.
Understand them.
Get into their shoes.

Only after you have fully understand where the other party is coming from, you will then be able to negotiate properly. Without proper understanding of the other party’s point of view, you will be left guessing his thoughts.

Being wise means being open to learning from the other perspectives. When you do feel stuck during a negotiation, it’s probably because you have not been able to see from the other point of view.

Remember: If 3 blind mice can say 3 different things, what about us?

—————–
Jens Thang
Negotiation Skills for Everyone

Email: jens@thenegotiationguru.com

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.

—————–
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.

—————–
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. =)

—————–
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.

—————–
Jens Thang
Negotiation Skills for Everyone

Email: jens@thenegotiationguru.com

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.

————–
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?

————–
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.

I stressed the importance of using standards when negotiating. However, many negotiations reach an impasse after both parties fail to agree on a single standard to use for their negotiation. It can be counterproductive if both parties spend too much time on the standards. Standards are definitely important. But if we are unable to agree to the standards, we should set it aside and get down to the issues. Start finding out the other party’s interests.

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

My team arranged to have a meeting at the lobby. In order to enter the building, we had to scan our identity card. I rushed to leave my apartment and left my card at home. I was refused entry by the security card. I explained my situation, and she referred me to the front desk to get approval.

At the front desk was a lady in her late thirties. She was busy sorting out a stack of documents.

“Hi, I’ve forgotten to bring my card. Is there a way I can get into the building? I have an important meeting to attend.”

She shook her head in a really dramatic manner and said “No, I can’t help you.”

I began to think of alternatives. I didn’t bring my phone so I was not able to drop my friends a call.

“How about this, I will leave my laptop with you. Let me into the building and I will get my friend out to sign me in.”

“No, you can’t do that. I will not let you in no matter what. This is the rule of the building.”

“Yes, I understand that it’s the rule of the building. I really have a very important meeting and I’m late …Can you make an exception just for this time round?”

“No.” She was really firm.

So I asked her “If you were me, what would you have done?”

“I will go back home and get my card. This is the rule. No one can change the rule. Sorry, I can’t let you in”

“What if YOU live an hour away?” I pursued.

-Pause-

She knew that I was not going to go away and I was really persistent.

“I didn’t mean to be nasty but I really can’t do that,” she said in an apologetic manner. This was my chance.

I kept quiet and looked at her. She became really uncomfortable with the silence and avoided eye contact with me. Finally, she succumbed.

“Alright, I will make an exception this time just for you. I will sign you in with my own card.”

Bingo!

Can you identify the tools I used?

When you start drilling for information, be careful not to assume. You should never create your own assumptions.

Do not assume what you’ve heard is the truth. But you should not start creating your own assumption too.

Target:  “The car design is really important to me.”

You:     “Oh, you should not be concerned with the design of the car. The engine is really powerful! It has a 3.6 litre V8 engine, producing over 500kW of power and accelerates from 0-100km/h in 5 secs!”

Target (in his head): “Who cares?”

You are making your own assumptions that he should be concerned with the performance. What if your target is really more concern with the car design and not the performance? You will be tuned in to the wrong channel. In negotiation, this principle works the same.

Never assume. Always ask!

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.