Time to negotiate

  • They are keen to sell it, and making you an easy offer, e.g., offer at the first turn
  • You have a complaint. Turn that into negotiation, since you are in a strong position.
    • Dirty hotel room -> move to a better room
    • dead mouse -> rejected a year worth of bread. What can we do to make you happy? Asked for something else.
  • As long as parties don’t walk out. Negotiation wouldn’t cost the deal.
    • Just a game to them. Doesn’t affect how they will like you. Does not make you like them more, if they slash the price.

Planning - most important part of negotiation

  • Set your walk away point. Walk away even if it is super close. When you set a limit, you mean it. Walking away empowers you, and let the other side know you are able to.
    • Your initial walkaway point may not be the actual one
    • Opening offer: external factors, e.g., market, going rates. Walkaway point: internal, personal, value to you.
    • Decide the walkaway point before checking the going rates
    • They may not afford to walk away too even when you are not able to either. See who will crumble first.
  • List tradable values before the talk starts. Use them to trade and get from the starting position to the final position
  • Opening offers - prefer face to face
    • Don’t open first. Ask for a budget. Pass it back if the other side don’t
    • Less talking, more questions.
      • What they have been doing.
      • What other options
    • Open below best possible when buying, and above when selling. Find reasons to justify the low opening offers
      • even a 10% chance is worth a try
      • but blame on yourself or they may be upset
    • Don’t open with round number. Start with 7 and 4. Sounds like you thought about that
      • Most likely rounding down
    • Ambitious, outrageous opening offer is fine later
    • You must do a flinch. Look into their eyes, do they flinch? If they don’t, don’t move from your offer. This is different from poker
  • Their issues: break it apart, which part is less expensive for me to address?
  • Your issues: come with examples and stories so they can understand
  • Shared issues: do both

Trading

  • Show trade instead of coming down unilaterally, which appears dishonest
  • Win/win instead of win/lose. Negotiate on price directly is zero sum
  • Either person can propose a win/win trade
  • Use “if you.., then I/we….” often. Much stronger than “how about giving you a cheaper price”.
  • Hide what is valuable. Don’t make a big deal of that or they will ask you to pay for that.
  • Things you are not bothered about, imply they are important and ready to trade it for something else.
  • Moving in small steps. People often not doing this enough
    • Implying you are near the limit
    • Most companies operate on a 10% profit margin
    • Brain prefers continuous installments rather than 1 big one
  • If we can meet these pressure points, what is the least you could drop the price to?
    • Silent close: repeat this low number and then shut up.
    • The first person to speak loses, at least revealing more info
    • and then this becomes the bracket of negotiation
  • Labelling concession
    • open about the cost of making concessions
    • identify the value to them
    • Legitimize why you held previous position
    • and then claim some value
  • Dealing with the inexperienced dictator,when their ego is hurt
    • give them small wins
    • “They didn’t go for your proposal as requested, but I was able to do some alternatives, enough for you to carry things forward”
  • Framing the issue to resolve as a discussion
    • I am concerned on X, let’s discuss - interest
    • I want to resolve X. - issue - then why is it important to you? - interest
  • Avoid reluctant yes or unhelpful no. Looking for a third option, e.g., quote a higher price, different time
  • Crumbling is always an opinion, just a game that may not work out sometimes

Closing

  • “Final offer” avoid to use it.
    • Gives up too much information
    • Neither side can move
    • If you present your offer in a take it or leave it fashion, you may be met with a reluctance to deal with your hostility. You can make the same outrageous requests, but if instead you allow your opponent to reject your proposition, you influence the decision toward agreement because they see that they can win with you. You will still get what you want and get the opponent to do what you want, depending on how you frame your offer.
  • Don’t split the difference. It is the the last feeble attempt before giving up.
    • Counter
      • I really can’t, it gotta be
      • fallback if they are walking away: can split the difference of difference in your favor
  • In the middle, are there any extras I need to know? Don’t ask this after agreeing on prices
    • Go for a counter nibble
    • Nibble is dishonest and should not let them get away with it
    • Similar counter for quivering pen
  • Salami: ask a lot of different things on many different fronts
    • Counter salami
      • Ask things back
      • If you want this, I want something else or more price
      • Don’t be afraid to start again as a last resort

Tactics

  • the vice: buyer says “you have to do better than that”
    • “still needs to get better than that”
    • “exactly how much better” and then flinch
  • Knocking the product: “not the color i liked, i would get it if it is cheaper”, dents
    • Counter: That is why the price is so reasonable/already priced-in
  • Reluctant buyer: “would prefer something else, but”
    • Reluctant seller, less common. “I suppose I could fit your request”
    • Counter: most likely a game
    • “Listen, if you decide to lower your price. I’d like to be the first one to know”
  • Hardball
    • analytical: rush them. Panic them
    • controller: make quick decisions on facts
      • Given them facts but don’t give enough time. Bore + rush
    • amiable: bully them
      • Push them. “Obviously you are gonna buy them”
      • “I will help you do it”
    • enthusiast: feelings. Bore them with details
      • Have to go back to the process, which will take this long
  • Discount should be on the invoice to set expectations baseline
  • Appeal to higher authority/bad cop
    • If the answer is maybe, just tell me no. if we were to create a proposal that met all requirements, any reason you couldn’t give me an answer today?
  • The other side is claiming current deal is giving him too much trouble. I will take it back and review, if we go with other options, should I go back to talk to you again?

References

  • Successful Negotiation: Master Your Negotiating Skills