Negotiations are a part
of everyday life. Whether it's a merchant creating a package deal for a good
customer, or a parent providing incentives for improving a child's grades, we
all use our negotiating powers to get what we want. Although the specifics of
each encounter may differ, the strategies and tactics used can easily be categorized.
A strategy is a long-term
position on which you can base your overall negotiations. A tactic is a short-term
position designed to further your effectiveness in a key aspect of the negotiations.
Because strategies and tactics have a great crossover in the ways in which they
are approached and applied, they can be grouped together. Remember that one
negotiator's strategy may be another negotiator's tactic.
Keep these principles in
- Choose the right
moment to utilize a strategy or tactic that will best achieve your goals.
Timing is extremely important.
- Learn the counters
almost by heart. Knowing them, you will be able to react quickly. This
will keep you in control of the negotiations.
- Ensure that the strategies
and tactics you choose allow you to retain any good will that may have been
established. Keep in mind; if the relationship is good, you'll ultimately
reach an agreement. Don't jeopardize it.
Here are common strategies
you can use, or that might be utilized on you. They should be part of a Win/Win
Negotiations environment to maximize their effectiveness.
This can take several forms.
It may be the introduction of new or unexpected information. Or, it may be a
sudden shift in demands that was not anticipated by the other side. Or, it could
be a change in the make-up of the negotiations team by adding new members, taking
some away, or simply replacing some of the existing team members.
Its purpose is to destabilize
the negotiations and put pressure on the other side to take action. If the surprise
is big enough and unexpected enough, the other party may react in a way that
adversely affects its position, enhancing your position and your ability to
guide the negotiations.
The counter is easier said
than done. Keep a cool head. React only after evaluating the entire situation.
A national motel chain once said, The best surprise is no surprise. By entering
a negotiations understanding that the opposition may try to surprise you, you'll
be able to lean back and assess what is happening.
This occurs when one side
says it will only accept a single outcome in order to force a quick decision.
A warning flag must be raised, though. This is a risky move. If you give an
ultimatum and the other party says, "no," your subsequent options are limited.
If you change your mind,
you will be perceived as not being up-front or well prepared for the negotiations.
In effect, you can paint yourself into a corner. The ultimatum is best used
as a tactic of last resort. When all-else fails, it may prompt the other side
to act rather than risk losing any future attempts to sit down and reach an
The counter to an ultimatum
is to provide real, specific offers that can easily be explained to defuse the
idea that the only option left is the ultimatum. In other words, the giver of
the ultimatum needs a logical way to save face. Present an alternative to a
situation that seemingly has none.
Reduction to the Ridiculous
This is the use of mathematical
calculations, gimmicks, or intangibles to present a position in a new and different
light. You can do this to make your position appear more reasonable.
The owner of an office building
in which I once rented space told me of a situation when this was successfully
used on him. His name is Ron. For many years, Ron returned to the same car dealership
to lease a new company car. In the past, he'd always selected a mid-sized, moderately
priced American model.
One year, he met with the
dealership to sign a new lease. But, instead of leading him to the type of car
he'd had in the past, the dealer showed him a new luxury import. Ron balked
at the idea. "The lease is too much," he said.
However, the dealer pointed
out to him that the luxury car cost only three dollars a day more than the model
of car he normally leased. "Now, Ron," he said, "isn't it worth $3 a day to
be driving the luxury car instead of the other car?" You guessed it - Ron went
for the more expensive lease.
In retrospect, Ron realized
that $3 a day is $90 a month or nearly $1100 a year more. He wouldn't spring
for the extra $1100, but he could see the logic in the additional $3 per day.
Yet, of course they are the same dollar amount viewed from different perspectives.
The counter is to analyze
all items with the same criteria. What Ron should have done was compare the
$9 a day that he was paying for his current lease to the $12 a day that he would
pay for his new lease.
Sometimes it will be beneficial
to request a breakdown of all costs and expenses that have gone into the other
party's opening position. The reason for doing this is to lower the final figure
by chiseling away at the individual items which went into compiling the total.
The counter is to provide
reasons either for not making the breakdown, or to show that the initial package
is really a bargain based upon the higher price of the individual items.
The validity of a proposal
may be verified by another person or organization, which has implemented the
proposal in the past. The purpose is to provide support from a third party.
This can be done via feel-felt-found statements. Here's an example:
"I understand why you feel
that way, Mr. Leahy. Ms. Norris felt the same way. But, by implementing
our suggestions, she found that her costs decreased by 30%. I'd be happy
to give you her phone number if you'd like to talk with her."
Many of us find the people
whom we contract for services by asking our friends and neighbors for recommendations.
Their good reviews become the basis for our choices. This same type of outside
opinion can authenticate a negotiating position.
Salespeople frequently carry
letters from satisfied customers as proof of a product's reliability. We know
that sales reps will say that a product is great, but a third party is the best
endorsement for a product.
The counter for this move
is to realistically appraise the reference. Is the reference's situation the
same as yours, or is your situation unique? It could be that the reference is
a personal friend of the negotiator. Maybe the product or service has changed
since the reference utilized it. All of these factors need to be considered.
A flinch is a dramatic,
negative physical reaction to a statement or an offer. It is intended to lower
the expectations of the other party.
Since a majority of the
information that we receive daily goes beyond the actual words used, body language
can convey a message that is more effective than verbal communications. Some
experts, in fact, say that as much as 55% of a one-on-one message is non-verbal.
So, a calculated flinch, followed by a sigh, then a period of silence, can make
the other side feel that an offer is unacceptable.
If this strategy is used
on you, refuse to be influenced by it. Enjoy the performance, but get on with
the task of negotiating.
Agent of Limited Authority
Anyone who has ever negotiated
the price of a car at a dealership has seen this strategy used. How often has
a sales representative told you that he or she would like to close the deal
on the car right now, but only the sales manager can make the final decision?
That's what it means to be an agent of limited authority.
The purpose of this strategy
is to buy time and get more input, hopefully moving the negotiations in a direction
that is more favorable. Since, in most cases, the negotiator really does have
the power to make the final decision, the counter can be packaged in two different
First, you could consider
becoming an agent of limited authority yourself, having only the power to "suggest"
a final agreement. Your final approval must also be obtained from an absent
authority. Or, you could ask to see the person who has the final say-so, refusing
to negotiate with anyone who cannot give a yea or nay to your
Policy or Procedure
In order to make a specific
point non-negotiable, one party could declare it to be "accepted" policy or
procedure. If the other side concedes this to be correct, the parameters and
dynamics of the negotiations have been altered. Now, rather than discuss this
item, it has been locked in stone by both sides.
Sometimes, merchants use
this strategy to avoid having to accept returned items. Signs in the store might
proclaim, "ALL SALES ARE FINAL." This statement reinforces a position that is
totally advantageous to the seller with no regard for the purchaser.
In reality, of course, very
few items are so accepted as the norm that no concessions can be made. The counter,
then, is to challenge the policy, showing how its enforcement will serve to
harm that party. For instance, you might remind the merchant that you can take
your trade elsewhere in addition to telling your friends and acquaintances about
the poor service you received.
Try It, You'll Like
You may have heard this
strategy referred to as the "puppy dog tactic" for the following reason. Think
about how a pet storeowner might increase the potential of selling a puppy dog
to a family having young children. The parents may be indecisive or not want
to spend the money on a pet, even though the children are insistent.
The owner might offer to
let the family take the puppy home for the weekend. And, if the family decides
not to purchase it, the puppy can be returned the next Monday. Of course, the
anticipated result is that the children will become so attached to the pet that
it would be unthinkable for the parents to return it. They will have tried
it and liked it.
This strategy is used to
let the other party see for itself the value of the item. Negotiations require
far less effort if the buyer or other party is willing. A trial run with a product,
which is highly desirable, can hasten a favorable decision.
To counter this strategy
if it is tried on you, attempt to arrange the same type of trial for all alternatives.
When they are compared using the same criteria, your perspective could change.
This strategy can best be
described by the stories, which former Secretary of State Henry Kissinger's
staff told about their boss. No matter how good their work, the staff members
reported, Kissinger would look them in the eye with a straight face and say,
"You've got to do better than that."
The idea was to force better
performance or, in the case of negotiations, a better offer. The phrase implies
that what was done was so obviously below what was expected that the point didn't
even require discussion. To counter this strategy, ask one of two questions.
The first: "How much better?" This question puts the burden of a response back
on the other party and forces that person to state a position.
The second: "Why must I
do better?" This query also sends the onus of a response back to the other party,
buying time to think and placing the other party in an uncomfortable position.
If a good reason for "doing better" cannot be given, no changes need to be made.
Often a negotiated item
will be perceived differently by someone at another level of the organization
than by the person directly involved in the negotiations. It may be better to
change levels in order to have a specific offer accepted more readily.
While most people interpret
this strategy to mean approaching a decision-maker who has more power in the
organization, it could likewise be smart to approach someone who simply has
a specialized type of input.
For example, who would be
better qualified to select the proper photocopier to buy - the boss or the administrative
assistant? While many people would try to sell directly to the boss, it is logical
to assume that the administrative assistant would have the power to sway the
boss into making a choice based upon the real needs of the office.
To counter this strategy,
you may want to meet in advance of any formal negotiations to ensure that your
position is consistent at all levels. In this way, the other party will find
that changing levels provides no advantage.
Put yourself in this situation.
You know you're close to agreement after extensive negotiations, but, somehow,
the other party just can't seem to take the final step in your direction that
will seal the deal. That's when a "quick close" might work.
You've seen this strategy
used many times. While bargaining with you for an appliance or an automobile,
to speed the process along, the salesperson makes an offer that sounds something
like this: "We're close to agreeing on this deal, but I can tell you're still
a little hesitant. Let me do this. I'll throw in a six-month warranty free.
That way, if anything does go wrong, you'll be covered."
The intent is to get you
to make a decision immediately, closing the negotiations and finalizing the
agreement. This type of small additional item can create enough of an impetus
to get you or other buyers to act. In most cases, the warranty will cost the
merchant little or nothing. However, the perceived value in the offer elicits
action. The deal is sweetened with the hope of a positive result.
To counter this strategy,
the real value of the extra item must be realistically assessed. If it is advantageous
to accept the offer, by all means do so. If, though, the add-on's value is more
fluff than substance, continue the negotiations.
These 12 strategies, when
combined with other effective techniques can make the difference in your next
negotiations opportunity. By understanding the give-and-take required, you'd
be better prepared to reach your goals.