Negotiating tactics

Most successful negotiators recognise that the way people involved in negotiations behave does not always reflect their true feelings or intentions. We are going to look at negotiating tactics that may be used by you or on you. Whether or not you choose to use these tactics, it is vital to understand 3 things:

- these tactics work

- they can be being used on you, and can be used by you

- once they are recognised as tactics, their effects are reduced, or eliminated

You may feel that there is no need in your particular case to negotiate or resort to.tactics in negotiation. This is a matter of personal choice.

In general, tactics are used to gain a short-term advantage during the negotiation and are designed to lower your expectations of reaching a successful conclusion.

There are many tactics available to negotiators. Here are some you may recognise.

Pre-conditioning

This can begin before you even get together, or start your negotiations with the other party. Let us take a sales example:

You telephone for the appointment and the other side says, aggressively:

Don’t bother coming if you are going to tell me about price increases. You’ll be wasting your time and I will be forced to speak to your competitors.

When you do arrive you are kept waiting in reception for half an hour, without being told why. As you walk through the door into the other person.s office they indicate for you to sit down, but don’t look up. Instead, they sit leafing through your competitor.s brochure, in silence, ignoring your efforts to make conversation. You are given an uncomfortable low chair to sit in that happens to be directly in line with the sun, shining into the office. At this stage, how confident do you feel?

The monkey on the back

Some negotiators have the irritating habit of handing their problems to you so that they become your problems. This is the monkey on their back that they want you to carry around for them.

A classic example is the person who says I have only got £10,000 in my budget. This is often used tactically to force a price reduction. Here is what you can do.

When one side says I have only £10,000 in budget, look worried. Say something like:

That is a problem. As you are no doubt aware, the cost of our systems can be anything up to £20,000 and I really want to help you choose the best system that meets your needs. Does that mean that if one of our systems has everything you are looking for, but costs £20,000, you would rather I didn’t show it to you?

The monkey is now on the other person’s back and they have to make a choice. If the objection is genuine and the budget figure is correct, you must try to look for an alternative that meets your needs as well as theirs.

If they genuinely can only spend £10,000 that is not a tactic but the truth. In dealing with tactics the first decision you must make is whether it is a tactic or a genuine situation. If it is genuine, you have a problem to solve, rather than a tactic to overcome.

The use of higher authority

This can be a most effective way to reduce pressure in the negotiation by introducing an unseen third party and can also be effective in bringing the negotiation to a close. I need to have this agreed by my Board of Directors. If they agree to the terms we have discussed, do we have a deal? Be careful to use this device sparingly so that the other side does not begin to feel you have no decision making authority yourself.

One way of countering this tactic is to say before the bargaining begins If this proposal meets your needs, is there any reason you would not give me your decision today? If the other side still wishes to resort to higher authority appeal to their ego by saying Of course, they will go along with your recommendations, won’t they? Will you be recommending this proposal?

Nibbling

Negotiations can be a tiring process. As the point draws near when an agreement is likely, both sides exhibit a psychological need to reach agreement and get on with something else.

You are very vulnerable as the other side reaches for their pen to sign the order form or contract to concede items that don’t significantly affect the final outcome. Oh, by the way, this does include free delivery, doesn’t it? or Oh, by the way, the price of the car does include a full tank of petrol?

Nibbles work best when they are small and asked for at the right psychological moment. Like peanuts, eat enough of them and they get fattening.

Good negotiators will often keep back certain items on their.want list. To the very last minute when the other party is vulnerable. Watch out for this.

The good guy and the bad guy

You may have come across this tactic before or else seen it used in films or on television. This is a tactic designed to soften you up in the negotiation. For example, you are negotiating the renewal of your service contract with the Buying Director and his Finance Director. You present your proposal and the Buying Director suddenly gets angry and walks out in disgust muttering to himself about how unfair you have been and how the.relationship. is well and truly over. You pick up your briefcase and are being shown the door when the Finance Director smiles at you sympathetically and says:

I’m terribly sorry about that. He is under a lot of pressure. I would like to help you renew your contract, but he really will not consider the price you have suggested. Why don’t I go and talk to him for you and see if we can agree a compromise? What is the bottom line on the contract? If you give me your very best price, I will see what I can do.

The best way of dealing with this tactic is to recognise the game that is being played and assess exactly what the quality of the relationship is. You may be able to say something like:

Come off it, you are using good guy, bad guy. You’re a superb negotiator, but let’s sit down and discuss the proposal realistically...

If you don’t have this kind of relationship, stand firm and insist on dealing with the bad guy, or else bluff yourself and give a figure that is within your acceptable range of alternatives.

One way of combining ‘good guy, bad guy’ with ‘higher authority’ is by saying things like:

Well, I’d love to do a deal with you on that basis, but my manager refuses to let me agree terms of this nature without referring back and he refuses to talk to salespeople. Give me your best price and I will see what I can do...

Body language

It is important in negotiation to react verbally and visually when offers are made. You may have seen the more theatrical negotiators hang their heads in despair or accuse you of being unfair and souring a perfectly good relationship when you present your proposal. Human nature is such that we can believe and accept these outbursts against us and our negotiating position becomes weaker as a result.

Ensure the next time you are in a negotiation that you react to the other party’s offer. If you show no reaction, they may be tempted to ask for more and more and you will lose the initiative in the negotiation. Also, it is almost certain that their opening offer is higher than the figure for which they are prepared to settle, so it is important that you clearly signal your unwillingness to accept the opening position. If you reach the point below which you will not go, it is important that you show this with your body language. News readers, when they have finished reading the news, have a habit of picking up their script and tidying up their papers. This tells the world that they have finished their task and are preparing to leave.

Similarly, when you make your final offer, it can be very powerful to collect your papers together and indicate with your body that it really is your final offer. Put your pen away, sit back in your chair and remain silent. Look concerned and keep quiet.

If your voice says final offer but your body is saying let’s keep talking, the other party will disregard what you say and keep negotiating.

The use of silence

During the negotiation, you may make a proposal and find the other party remains silent. This can be very difficult to handle and often signals.disapproval. to the inexperienced negotiator. Just as nature abhors a vacuum, so silence induces the need in people to talk.

If you have a proposal to make, make it and ask the other side how he, or she feels about it. Having asked the question, sit back and wait for the answer. Whatever you do, don’t change your offer as this could seriously weaken your position.

The vice

A common technique used by negotiators when presented with a proposal is to say ‘You’ll have to do better than that. This can be a very powerful statement, especially when used with broken record’.

The most powerful way of dealing with this is to ask them to be more specific. Whatever you do, don’t weaken your negotiating position in response to the vice by giving anything away, too easily. This will only encourage repeat behaviour.

The power of legitimacy

People believe what they see in writing. We all assume that if a thing is printed or written down, it is non-negotiable. This is what can make price lists so powerful. If you have to present a customer with a price increase or you wish to encourage an early order to beat a price increase, show something in writing such as an office memo from your boss announcing the increase. This will have a far greater impact than just saying your prices are about to go up.

When presented with a price tag in a shop, ask to speak to the manager and make him an offer. You could be surprised at the results.

The low key approach

Don’t appear too enthusiastic during negotiations. Over-enthusiasm during

negotiations can encourage skilled negotiators to review their strategy and demand

more.

If you are in a negotiation and the other side is not responding to your proposal, recognise this could be a tactic and avoid giving concessions just to cheer them up.

Salespeople like to be liked and will often give money away in a negotiation, if the

other side appears unhappy.

For example, if you are buying a car avoid saying to the seller things like:

This is exactly what I’m looking for. I really like the alloy wheels.

Develop a low-key approach. Say things like:

Well, it may not be exactly what I’m looking for but I may be interested if the price is right

Negotiation Strategy

Negotiation strategy is a topic that elicits enthusiastic debate in most forums. Most organisations and individuals approach negotiations in a manner that can be best described as ad hoc. Often times the “negotiation strategy” is discussed briefly in the car or on the train on the way to the meeting.

In the competitive environment that organisations and individuals find themselves in the present day, it is necessary to approach the topic of negotiation strategy far more seriously. Firstly, we should investigate our negotiation strategy at the highest level of abstraction i.e. at the corporate level. If we want to reduce variance in the way that we deal with customers, suppliers and other key stakeholders it follows that we should define a negotiation strategy that sets a framework against which the organisation can measure itself. Any negotiation strategy should answer the questions why, what, who and how?

Examples of why may be because we have a need to increase the margins on new business or reduce the purchasing budget.

Examples of what may be that we will not extend discounts in excess of 10%, we will not make any concessions without a counter concession and so forth.

An example of who may be to ensure compliance to the strategy by all our customer/supplier facing teams.

Finally, an example of how may be that we will ensure a formal strategy is compiled, a process is derived from this strategy, and all our negotiators will be adequately trained & equipped with tools to ensure compliance.

It is always interesting to take a look at some of the ways negotiators go about their business. Before reading through some of the content that follows, it is important to note that it is regarded as of the utmost importance to use all methods of persuasion honestly and not with the sole purpose of benefiting yourself at the cost of others.

It is important to use all methods of persuasion and influence ethically. The use of these methods should create something of value to both sides in any interaction.
1. The Nibble

This is a favourite technique used by sales people. Immediately, when a deal is concluded, they add additional cost items, e.g.

Because people become less stressed once a deal is made, the sales person has an excellent chance of succeeding with add-ons (kids are masters at this play). Think of a car sales person who, after the decision is made to buy the car, suggests that a sun roof, alloy wheels etc. could be added for a few extra pounds per month.

The customer can counter this by responding to the sales person's initial statement.

The customer has a moment of power because the sales person is psychologically at his weakest directly after the deal is made, as he does not wish to see his hard work undone. By nibbling you can get a little more after the basic deal is clinched.

This "tit-for-tat" style of negotiating often make people uncomfortable, as they do not want any hassles when they want something and just simply buy the product in good faith, regardless of the "ploys" that salespeople may be using.

2. The Flinch

Here the customer acts as if he has not heard the price correctly, but a new benchmark is set that will now act as the basis of the bargaining to follow.

A concession typically follows from the sales person.

Should you not flinch when a low offer is made, the other party will conclude that you are still above your real base. By accepting an offer without flinching you may miss an opportunity to do better. Although the other party may feel they have done well, they will not feel as good as they could possibly feel, as they will have a suspicion that they could have done better.
3. Deferring to higher authority

Customer: "I'm not happy with the repair fee. It is far too high for the amount of work done. I refuse to pay this much.

Engineer: "I just work here. If you don't pay, you cannot have your machine. I have no authority to change the costs."

A neat deferral to higher authority. What can you do?

Customer: "Who can?"

The engineer could counter by responding: "The directors in our Belgian office."The only way to counter this ploy is to ensure that you probe for all decision makers during your information gathering phase.

4. Good Guy, Bad guy

A sales person and the owner of a property are negotiating with a prospective buyer.

Difficult and dangerous. The buyer may end up asking the sales person to negotiate on his behalf with the owner. The best way to counter is to simply tell the other party that you know what they are doing. A ploy perceived is not a ploy that works.

5. The set aside

You are in a meeting where the purchasing manager is talking to the representative of a printer.

The sales person is in danger that the negotiation will collapse before it has begun; before a relationship is built; before all the facts are out in the open. An inexperienced negotiator will either now give a concession or allow the negotiation to collapse.

The experienced person will respond and while saying, it is also helpful to gesture the putting aside of this issue for a time by making as if you put it at the edge of the table or on the floor.

6. The hot potato

How do negotiators pass hot potatoes? Ownership of the problem is given to the other party.

A skilled negotiator will test the validity of the buyer's statement. The buyer is forced to own the problem.

7. Splitting the difference

Get the other party to suggest that you split the difference.

The dilemma presented by this technique is that the seller ends up splitting his side twice, causing the buyer to pay only 25% of the difference.

8. The trade off

The average consumer is likely to accept an excuse from a service provider. On the other hand, a skilled negotiator will see this as another moment of power to negotiate a concession. It stops a further process of "grinding down". This "promise" could also be banked for future use.

9. Funny money

Be careful of this one. You are about to spend thousands of pounds more than you intended. Negotiating with funny money works!

10. The walk away

Once a negotiator has decided that he or she absolutely must have something, a big erosion of power takes place. Know this, there are no once-in-a-lifetime deals. Do not become so emotionally involved that you cannot walk away. You only have real power if you are prepared to walk away.

11. Delaying & stalling

When the other party deliberately uses delaying tactics you should not focus on the behaviour, but rather on the intention behind stalling. Do they want to wear you down to make you give up or become more flexible? Stay emotionally detached and make sure you do not have a deadline, especially not a self-imposed one. Counter this tactic by telling the other party you know what they are doing and that it will not work. You could also consider giving them a deadline that is well within the ultimate deadline you might have.

12. The pre-condition

This is where a negotiator obtains concessions for merely consenting to negotiate.

The unskilled negotiator may easily fall into the trap of limiting their options even before the negotiations start. Such a concession belongs in the bartering phase where a counter concession can be asked. Counter this by setting aside this issue for a while and just continuing with the negotiation.

13. Personal attacks

Personal attacks are often a deliberate tactic to throw you off balance or to make you emotional. Watch out! Remain emotionally detached and recognise it as a tactic. Interrupt the pattern by smiling. Keep people and issues and people and their behaviour apart. You could also respond by reminding the other party that you together framed the negotiation as "agree-to-agree" and working towards a win more/win more outcomes.

14. The withdrawn offer

This tactic can be used at any time in the negotiation, especially when the other party is deploying the walk away tactic. It involves a bluff by suggesting or threatening to take away agreements that have already been made. This could often result in a response such as this: "I'm sorry, it's too late! We are accepting your offer!" The other party then reluctantly lets the item go. This results in one party feeling that they have secured a good deal. A good counter to this tactic is to walk away and test the validity thereof.