In my KNACK of Negotiating training sessions, the focus is usually on the 'tug-o war' that takes place between suppliers and retailers, as they both strive to protect their share of a diminishing trading margin. The ongoing relationship between these parties is invariably a vital factor, so I am careful to impress on my trainees that, irrespective of whether they are the buyer or seller, a genuine win/win outcome is really all about applying those skills in a friendly conversational manner, not unlike that same genuine interactive eye-to-eye contact they would enjoy with a friend or colleague. My aim is therefore to uncover and develop the threads of their personal expertise - their interpersonal skills, communication techniques, and selling dialogue - and weave them into a complete basket of negotiating tools that is effective, but basically non-confrontational.
However, my trainees are quick to realise that the other party may well possess the same skills and be trying to create the same comfortable atmosphere, so maybe a tie-breaker or two is necessary to break up the party before it simply becomes a 'group hug'. They are quick to realise that they will need to come up with some sort of strategy to give them the edge, not necessarily unfair, but at least competitive. They are anxious to explore what common trickery they must learn to combat, and on a more positive note, what legitimate tactics they can use to gain the upper hand.
Over time, these discussions have furnished me with a couple of handy checklists, one at the pre-planned strategic level, and another at the more reactive tactical level. You might find my workbook notes from these round table sessions rather useful, so to help with retention, I have compiled the first of these - the strategic issues - in the form of a memorable acronym - NEGOTIATING:
N o must be an option - be prepared to walk
E motions must be controlled
G et a concession for every one you give
O rganise your information - do your homework
T alk with absolute conviction
I nvite the other party to present first
A im for the top with your expectation
T iming is important - don't rush the deal
I nformation is critical - ask and listen
N ever ignore the other party's needs
G ive pressure - don't take it
No must be an option - be prepared to walk. In other words, never negotiate without the most powerful option of all - your preparedness and willingness to say no. When you indicate that you will withdraw from discussions if you can't strike a satisfactory deal, the other party will know that you are serious, that you mean business. They can see that you are not desperate, and that you will be unlikely to yield to their demands simply to make a deal. It must not be seen as a threat or an ultimatum, simply a reasonable statement of your position, a reflection of your capability to walk away from the table if you are not able to reach an agreement. Effective negotiators not only know when to walk, but how to do it leaving the relationship intact. Of course it is not prudent to walk away unless you have somewhere to walk to - a viable alternative. Even if you have, the threat of walking should not be seen as a safety net, but be used as a bargaining point. Rather than allowing it to simply become the soft option, or the proverbial 'dummy-spit', it should be used to provide leverage in your negotiation. To preserve its impact, it should be used sparingly, and seriously... remember the legend of 'the boy who cried wolf'.
Emotions must be controlled. Fretting over the other party's behaviour, or over issues that are not pertinent to making the deal, can sabotage a negotiation. If someone is rude or difficult to handle, the most important thing is to take the time to ascertain the motive behind it. Above all, remain detached, and don't take it personally. It is far more productive to fill the role of moderator, rather than perpetrator.
Get a concession for every one you give. Whenever you give something away, get something in return, otherwise you are inviting the other party to ask you for additional concessions. The old adage 'if we give something for nothing, it will be valued at nothing' applies here. If they have to earn your concession, they will derive a greater sense of satisfaction, and realise that they must trade something of equivalent value. This might sound easy, but in reality is can be quite difficult to do. There is a great temptation to say yes too quickly, particularly from the seller side of the table, as many salespeople mistakenly think that they will lose the sale if they don't agree to the full concession or immediately accept the first offer. On the other side, most buyers accept that hard negotiating is part of the deal-making process, and are more inclined to stand their ground. Before you agree to the other party's demand, you need to take the time to absorb the likely ramifications, and consider a counter offer.
Organise your information - do your homework. Having the discipline to invest time in pre-qualifying as much as possible of the other party's wants and needs with comprehensive blueprinting is always an easier option than having to do it all during the negotiation process. Take the time and make the effort to gather as much information on the other party as you can before the negotiation - their company, their product, their proposition, their needs, and the personal motivators of the individuals, even down to their career aspirations. What pressures do they feel? What options do they have? Having these known factors at hand can allow you to set a plan which gives full rein to your 'live' interactive skills - particularly your body language interpretations - to deal with the unknown.
Talk with absolute conviction. We all know that we can never be sure if we have communicated effectively or not until we get some feedback. To minimise the disruption caused by continually pausing to seek that feedback, you need to deliver your message with conviction. When you are stating your case, whether tabling an offer or responding to one, you must leave nothing up in the air; you must substantiate any claim or statement you might make by supporting it with a fact, pointing out the logical advantage, and in turn highlighting the personal benefits that will flow from it. Remember, a feature of your proposition will mean nothing to the other party until its advantage is recognised, and you have confirmation that the benefit of it is appreciated.
Invite the other party to present first. There are two schools of thought here. One is that the first offer or demand to hit the table enjoys a psychological advantage; that it serves as an anchor, and becomes a credible benchmark which tends to remain in the back of the minds of both parties throughout the negotiation. It's a bit like competing in a high jump or pole vault - in fact any competitive sport. Once the height of the bar has been set, or the fastest time has been done, it becomes the goal that must be chased down. This is certainly the case in life or death situations, or where formal demands are involved, such as a trade union log of claims. However, in the commercial buying and selling situation, most experienced negotiators believe that everything is negotiable and that leading the charge is not such an influential factor. They are generally comfortable letting the other party set the pace, not unlike having the last word as the closing speaker in a formal debate. Buyers should always invite their suppliers to first 'show all they have to offer'. This is a much better way to establish just what product and profit opportunities are available... and it avoids the temptation to over-prescribe the requirements. Again, it is a case of the old card-playing rule - 'reveal only enough to win the hand'. The situation is no different from the other side either. While it is often inevitable that the seller needs to present their proposition first, I nevertheless encourage my sales trainees to refrain from telegraphing too much of their offer until they have used their open-question routines to pinpoint what the buyer is looking for. It may seem like a game of cat and mouse, but it is surely no game. Saving the best to last in all or any particular part of a negotiation must be your preferred strategy.
Aim for the top with your expectation. Successful negotiators are optimists, so don't be afraid to ask. If you expect more, you'll get more. A proven strategy for achieving higher results is opening with an ambit claim - an extravagant proposition. Within reason, sellers should ask for more than they expect, and buyers should offer less than they are prepared to pay. This provides the necessary bargaining leverage. While you must know your fallback position, and be sure about what concessions you are prepared to make on each of the main issues, your initial aim must be pitched above all that. Nothing short of the best possible outcome must be your starting objective, and along the way, if the odds happen to swing strongly in your favor on any key point, you need to have the courage to put all your fallback plans aside and just 'go for it'.
Timing is important - don't rush the deal. Being patient is sometimes very difficult - you want to get it over with, to just get the deal done. Sure, you need to know what to ask for, but being sensitive to when to press for it is just as important. Usually, the party who is more flexible about time has the advantage. Your patience can be unsettling to the other party if they are in a hurry because they believe that you are not under pressure to conclude the deal. This may encourage them to offer incentives to speed up the process. If you suspect you may be pressured for time, remember that 'prevention is better than cure'. A pragmatic approach to setting and agreeing the meeting timetable/agenda in the first place will help to avoid this problem. Although you may attempt to impose a deadline on the other party, you must never reveal that you are tied to one: this will simply invite the other party to exploit it. You need to also consider the overall timing, as there are clearly good times to negotiate, bad times to negotiate, and times when you really should take a break and give both parties the opportunity to ponder their position. The bad times could include when there is unreasonable stress or anger developing on either side, tiredness is setting in, or there is preoccupation with something else that is not specifically related to the issue at hand.
Information is critical - ask and listen. While your ability and willingness to ask well-considered open questions - to invite the specific information you need - is important, being disciplined enough to listen to the answers is absolutely vital. Remember, the deafest person is the one who doesn't listen. Don't forget too, that your eyes can do as much, perhaps more, of the active listening for you. Despite this, too many people just can't stop talking. Good negotiators ask their probing questions and then let their silence do the job. The other party will tell you everything you need to know - all you have to do is watch and listen. The catch is that we are often so busy making sure that people hear what we have to say - or thinking about what we must say next - that we forget to listen to what they are trying to tell us. This is a serious flaw in any form of communication. In negotiating, it can be fatal!
Never ignore the other party's needs. The best negotiators don't let their own ego get in the way of a good deal, nor do they set out to make the other party feel entrapped. The outcome is what is important to them, not who appears the smarter, or who gets credit for it. Having a range of pre-planned options ready for discussion is a proven strategy. Not only does it make the other party feel empowered to make the best choice, but it shows the consideration you bring to the table. It demonstrates the forethought and planning you have invested in negotiating a deal that will work for them too. If you help the other side to feel satisfied they will be more inclined to help you satisfy your needs. That does not mean you should give in to all their positions. Satisfying the other party means fulfilling their real interests, not necessarily meeting their stated demands. You must keep in mind that their position, or demands, is what they say they want; their basic interest is what they really need to get.
Give pressure - don't take it. We have a tendency to focus on our own pressure, on the reasons why we need to make a deal. This can not only hold us back, but is easily sensed by the other party, who may then use it to manipulate a stronger position. Instead, ask yourself what pressures they may be under. They will surely have some. Look to discover what those pressures are, then plan to use them to advantage. By all means, be prepared with a range of alternatives to help them resolve any handicaps they may have, but avoid absorbing their problems. You don't want their 'monkey on your back'. Throughout complex negotiations, these pressure points will ebb and flow. You will develop what are commonly called 'positional power-plays', where you hold the upper hand on a certain issue. The other party will have their moments as well. Being vigilant enough to recognise this state of play early enough to capitalise on your advantage, or to diffuse theirs, is very important. Again, body language will provide most of the clues, the extremes signs of confidence versus nervousness being very visual and very obvious.
Once we have digested these overall strategies, we can pretty much pre-plan how we might manage the negotiation process. However, across the negotiating table, not everything goes to plan, so we need to get down to the tactical level, the ground level banter that may emerge during the course of the negotiation. Some of it may well be part of a pre-ordained strategy, but often it will be a spur-of-the-moment reaction. Tactics like this are certainly a mixed bag, and while many of them can be employed legitimately, often they are simply used as destabilising tactics. Most of the common examples have arisen in my workshops. I call these 'the Dirty Dozen', not necessarily because there is anything dirty or underhand about them, but purely to help with retention. Whether you are fairly and justifiably using them yourself or find yourself having to combat them, you need to be aware of these common tactics. Here they are:
1. The Emotional Outburst
2. The Timeframe Tactic
3. The Final Bite
4. The Higher Authority
5. The Written Contract
6. The Silent Treatment
7. The Good Guy/Bad Guy Pantomime
8. The Ultimatum
9. The Setting
10. The Order of Presentation
11. The Ignorance Plea
12. The Minor Point Argument
1. The Emotional Outburst. If used deliberately, this is usually a tactic to speed the negotiation to a conclusion, or to derail the real argument. If it occurs spontaneously, it can become quite personal, and may have the power to override sound reasoning from both sides. Overcoming the temptation to respond in kind is clearly the best way to deflate the emotional balloon and to allow the conversation to drift (or be steered) back to the real issue. We must remember that anger and rationality do not go hand in hand. Not to be confused with this is the more controlled and polite showing of emotions, among the most common of which is the so-called 'flinch' or 'wince', a silent but visible reaction to disappointment. It delivers a very clear indication that you are not satisfied with that particular aspect of the deal, and are expecting better. And, it does so without inflaming any nerve endings!
2. The Timeframe Tactic. If things aren't going their way, successful negotiators will often fall back on the tactic of prolonging discussions until a last minute sense of urgency becomes inevitable, and a concession is required to break the stalemate. It is not necessarily pre-planned; it can arise out of frustration during the course of the negotiation. It is important under these circumstances to give a clear message that you aren't flustered by it. I have been in this very situation once myself, in Tokyo. Japanese businessmen frequently use this tactic, although in their case it is not so much an on-the-run tactic, but a well-practised delay strategy, with the final decision phase often spilling into the airport departure lounge. While suggesting that you will have no alternative but to walk if you cannot reach agreement might be a reasonable response in most circumstances, not so with the Japanese. Anything remotely resembling an ultimatum is seen as a threat - a loss of face - and a sleight on their culture. I simply countered it by asking my hosts to cancel my return flight and extend my hotel stay for me. Fortunately, it worked. They could see that I was determined to use the same patient, determined, and committed approach to decision-making that characterised their own business culture, and that I was not prepared to be hustled. It cost me an extra day, but the result proved it worthwhile.
3. The Final Bite. Often called the 'nibble', this is the tactic of seeking one last concession after the major issues have been agreed, often with the simple phrase, 'Oh, by the way, now that we have...' Understanding how to both use and disarm this tactic is vital to any negotiator. If you are old enough to have seen the television detective show Colombo, you will remember how our unkempt, bumbling hero, Inspector Colombo, solved most of his mysteries by appearing to conclude a conversation, beginning to walk away, then nonchalantly turning back with just one last question. This is not just good script-writing; this is good negotiating!
4. The Higher Authority. Usually withheld to the decision-making stage, this tactic is based on a response like, 'I have gone as far as my authority will allow on this. Any further movement will need to be approved from above'. Alternatively, the other party may simply duck for cover under the veil of company policy. Ideally this is negated by qualifying the 'decision-making authority' position up front, but if you are confronted by this, treat it as a positive. It is an invitation to pursue it further, and you should accept the invitation to do so. If you are the one using this tactic, it is important that you get a commitment before referring it for higher approval. For example, 'If I can get this approved for you, are you prepared to proceed?' As well as showing the other party you are willing to go into bat on their behalf, this sets you up to close the deal.
5. The Written Contract. The power of the printed word in a contract or agreement is often used to create the impression that there is little room for negotiation - the 'rules are rules' tactic. You need to know where and when to use it, and how to offset the effect of it if you are on the receiving end of it. Most suppliers and retailers have a written form of supply agreement, and it is not uncommon to see both hit the table together as each party leans on the 'take it as read' implication of a formal contract to add substance to their position. Having your own pre-printed form of agreement at the ready is the ideal response to this tactic. Elaborately printed pricelists are often used the same way, setting benchmarks from which 'special deals' really do appear to be special.
6. The Silent Treatment. Experienced negotiators use the conversational pause to great effect, working on the listening principle - 'all I can learn while I'm talking is what I already know'. Your professional questioning skills, and more importantly, your listening discipline, are the only answer here. There is an old saying about the effect of prolonged pauses - 'he who talks next loses'. In negotiating, we often hear a variation of it - 'he who first talks the numbers loses'. While I'm not comfortable with the terminology of 'winner and loser', I have to concede that there is definitely some merit in both of these underlying messages. For example, you must never fall into the trap of negotiating against yourself. Once you make an offer, wait for a response before carrying on. By waiting, you avoid the possibility of unwittingly overriding your own offer by making further concessions. If you don't wait, you could fall victim to the other party's clever use of the pause, as they hold off their response in the hope of provoking a better offer. 'Silence is Golden' is not only the title of one of Simon and Garfunkel's greatest hits; it is also a 'golden oldie' among my favourite negotiating tips.
7. The Good Guy/Bad Guy Pantomime. This is often used to position the regular, or initial, negotiator as the 'good guy' with a colleague or superior chiming in to wear the black hat. It preserves the relationship issues, while still allowing a tough stance to be injected on the issues at hand. You need to know how and when to both employ and defend this strategy. Sadly, it is so often misused that it is regarded as little more than a game, but when used appropriately, it is a fair and reasonable tactic. If you decide to use this tag team tactic yourself, be sure that all involved are well briefed. Each must understand the position that he or she is expected to take as the dialogue progresses. Failure to gel the team effort could accidentally deal the other party a winning hand, by presenting them with an invitation to divide and conquer.
8. The Ultimatum. Often seen as a bullying tactic, issuing ultimatums can be successful from an extreme position of strength, but more often than not will backfire, leaving the issuer with no chance of recovering ground. The best way to defuse an unwanted ultimatum is to suggest exactly that - to politely respond with a suggestion that this will simply close down the discussion, and strip both parties of any room to manoeuvre. If you sense that there could actually be some room to move, a good defence is the standard trade-off technique, with a response along the lines of, 'If we do that for you, what can you do for us?' This technique does three things. First, you may get a concession back from them. Second, it will lower their expectations. Third, it will discourage them from coming back at you for more. Apart from that, if they are not serious, this will call their bluff. Fortunately, most negotiators are well aware that ultimatums generally destroy relationships, so we find that they are usually restricted to casual bartering situations, where ongoing business is not an issue.
9. The Setting. There is more than just the home game advantage to selecting and setting up the environment. From the comfort of the surrounds to the available resources, whether you are negotiating home or away, or on neutral ground, needs to be factored in to your preparation. Retail buyers religiously use their home ground advantage wherever possible, particularly in respect of time management. Experienced supplier salespeople, aware of the benefits of drawing buyers out of this comfort zone, will often negate this by inviting them to special showroom displays and trade night presentations where they can create a more captive atmosphere. We all know that in sporting fixtures, teams tend to score more points and chalk up more wins in home games. The game of buying and selling is no different.
10. The Order of Presentation. Even if you win the toss, you may still face the dilemma of whether to bat or field. As noted earlier, your preferred strategy should be to allow the other party to state their case first. While in most cases the reality is that the seller will expect to have to lead, and the buyer should feel comfortable with encouraging them to, either may be goaded into 'spilling the beans' earlier than planned. Either way, 'keeping an extra card up the sleeve' will give you that ultimate bargaining chip. 'Know when to hold em; know when to fold em' should mean more to us than just the words of a Kenny Rogers song.
11. The Ignorance Plea. Feigning ignorance is a cunning fishing tactic often used by seasoned negotiators. Via the use of cleverly-phrased open questions, it is the most effective and comfortable way to extract vital background information from the other party. Often, the other party will unwittingly reveal the very core of their strategy, given the temptation of airing their knowledge. This mock naivety is often used to set the scene for the low-balling tactic of planting a seed of low expectation then gradually building it, or at the other end of the scale, the high-balling tactic of using an outlandish false promise to get attention, then whittling it down - not unlike the concept of a 'Dutch Auction'. Either way, it is a sign that the other party either hasn't done enough homework, or is deliberately trawling for opportunities. Body language will usually reveal which is the case.
12. The Minor Point Argument. The major outcome can often be derailed by pursuit of a relatively unimportant aspect. This is known as the 'red herring' tactic. Whether you concede the point and get on with it, or use your objection-handling skills to put it into perspective, it is important to steer the dialogue back to the mainstream as soon as possible. Your directive questioning skills will come into play here.
So there it is... a summary of the main discussion outcomes from my live KNACK of Negotiating sessions - from the higher level planning strategies where you try to get it all right beforehand, to the lower level action tactics when it doesn't necessarily pan out that way and you have to think on your feet - a couple of handy checklists. I hope they prove helpful next time you sit down at the negotiating table.
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