Negotiation happens in everything in our life.
The goal of every negotiation is to get what you need or want as quickly as possible so that you and your organization can move forward without delays. ~ Peter Sander, author of Negotiating 101
It’s at home when your little child negotiates with his mother to buy him the toy he saw.
Negotiation exists in small businesses when you make a deal with a client who has a lot of cash and willing to invest.
Negotiation is in big corporations when you, the CEO, negotiate with other executives to get the best deal possible.
It’s even in our daily life when we purchase stuff, especially when buying a car or a house because customers just don’t make many sales of those.
You’ve been negotiating since all your life, perhaps, without realizing it. What you need to do is to put some structure around what you already do.
It’s important to know that negotiation is not always about price. It can take all attributes of a deal: Delivery, timing, extras, having the right to negotiate a future deal or a relationship with the client.
Here are some tricky negotiation tactics that you can use to become a better negotiator:
1. Be willing to walk away
A car salesman pitches a high value above your budget. You negotiate, but the salesman rejects your offer. You walk away and the salesman calls you back to sit on the table again to reach your desired deal.
This situation happens many times. But why does ‘walking away’ work?
Because the lower sale is better than no sale at all. Beware that your lower pitch should be reasonable enough because as you want to win, the car counterparty wants to win as well.
Remember, negotiation often is a win-win situation.
What if the salesman doesn’t call you back?
You might say, “Hey, I think I’ve lost my keys.” so you return to the room (hoping that they change their mind).
Note: Don’t try walking away with people who know you well and negotiate with you on a regular basis. Try this with an only one-interaction deal like a car salesman.
How about people who deal with you regularly?
Say, you go to the negotiation room with your friend and the counterparty rejects your offer and you’re starting to walk away with your friend.
A few seconds later, send your friend to the table. He can negotiate with an opening call like “My friend really wants to deal with company X, but I like your brand better. He’s just being difficult over the price/etc.”
In any deal you make with a counterparty, don’t make them smell that you’re too desperate. If they smell that, expect that they will increase their demands.
So if you’re willing to walk away, you’re really in a position to negotiate.
2. Be willing to stand still
On the other hand, what if you’re the salesman of that car and someone walks away?
Only if there is a potential buyer and you’re sure this is a good offer and service that he really needs, you can use this technique “Take it or leave it.” If the buyer needs that offer, he will accept it. If not, he will walk away.
3. Always ask for more
This is a psychological technique called, “The door-in-the-face technique.” It’s a way to ask for so large value that the other party will turn down and then is likely to agree to a second, more reasonable request and be willing to accept it.
If you ask for more, you may get what you desire or get a reasonable deal better than what the counterparty offered. Don’t worry! your negotiation will not shut down when you ask for more. Just ask. If a company offers you a salary, be sure that they should be willing to negotiate. They put a lower bound on their budget for your salary to compensate for what’s possible if you asked for more.
Say, a company offers you a $60k salary. What’s better to ask for more is to be specific about what you want even with nonsense calculation. Like, “I want a raise from $60,000 to $72,250 which should include insurance (if they don’t have it) and my commute to the workspace.”
This calculation can give the interviewer a sense that you did your research and compared the salary related to that position.
Beware that this nonsense calculation can only be applied to low-to-medium level deals. If you’re negotiating with a high-stake deal like a $1B, accurate numbers matter and you should be able to get a sense of the deal and study what is expected to be on the table.
4. Get your feet in the door
This is kind of the reverse of the door-in-the-face technique. It is rather a “Feet-in-the-door” tactic that you can use to haggle with the counterparty to start with an initial small request to increase the chance of a second one.
For example, a salesman says that this shirt costs $100. You haggle with him to get it down to a small price like $50. You can then follow up if you can buy two shirts for $100. This means that you’ve just successfully negotiated to get two shirts as if you just bought one.
5. Never reveal your budget
If your counterparty asks about your budget, make him feel that he’s not the only one who sells to you.
You can say, “Don’t ask me about my budget, just give me your absolute price because I’ll come to you by the next week only if I see that your competitors don’t provide a better price. I now compare prices in 5 different places.” Now, you can go to the 5 different salesmen and do the same strategy.
You then know what the best price you’ve got so make a call to that salesman a week later with a lower offer and say if they beat it, they get the sale.
This way, you leverage the competition and you can buy your dream car (or whatever) with this strategy.
6. Give two options
When you negotiate, especially, with kids don’t give them too many options. Give them just two options and they’ll be able to understand you better and decide. They feel like they have control over their situation.
For example, if the weather is cold and you want them to wear more clothes, you can ask them, “Do you want to wear the green jacket or the black one?” Either way, they will put on a jacket.
If you’re starting driving the car and your kids are in the back not wearing the seat belt, you can ask, “Do you want to put on your seat belt or should I get off the car and put it on yourself?” Either way, they have no option other than to be safe.
Say, you’re a manager and you ask your employees to do certain tasks. That employee gets the task done delayed and you notice that his learning curve is taken down. Try to make him decide instead. To decide between task A and task B, say he would choose task A. It would be much better for him and you’d see that he values his work and (most of the time) gets things done faster.
When you give people (especially kids) two options, make sure they are both equal. If they feel that, they will be able to decide while having control.
7. Use shills and decoys
Imagine a shirt priced as $80 sitting next to another shirt priced as $50. That $80 shirt is a decoy. A decoy is a priced item to change your perception of the value of the deal.
The $50 shirt may seem like a good option when $80 is the only alternative choice.
Another example could be a $300 once-a-week do-everything service vs a once-every-2-weeks service for $150; a decoy.
But what is the shill? The shill could be the salesman who thanks you when you start buying.
Summary
To wrap up, there many types of negotiation tactics that you can use. We showed 7 tricky negotiation tactics examples. Here is a summary:
- Be willing to walk away
- Be willing to stand still
- Always ask for more
- Get your geet in the door
- Never reveal your budget
- Give two options
- Use shills and decoys
These techniques of negotiation need to be practiced regularly to master them and become a better negotiation.
Credit
- Negotiating 101 by Peter Sander
Published on Brainwave