Negotiating – Smart V Stupid

Experience has shown that some of the typical approaches in negotiation are very smart… or just the opposite. Here are ten of the most common, starting with the smart ones.

Start Positively with Compliments

Smart negotiators realise that the atmosphere they create will impact in the other’s perception and behaviour. Make it clear that your intention is to find the best deal for both of you. Rather than positioning each other as competitors, see each other as partners working together to solve your mutual problem. Just like a mountaineer needs a partner to reach the highest peak, you need each other to achieve the best mutually beneficial agreement.

If you can include an appropriate compliment, it will not only fast-track your rapport-building, it will also introduce positive labelling. It has also been shown that by positively labelling someone, you can influence them to act more that way. So, if, for example, you were to compliment them on being so understanding, it might just cause them to try to be more understanding!

Make Them Aware of Your Preparation

Your preparation is often the most important work you do in a negotiation. Thorough preparation gives you the foundation to make your offer with confidence and the leverage to unsettle the other side.

If you know something that they don’t know you know, use it early. Some negotiators will hold back this information, saving it as ‘ammunition’ to use if the other party becomes difficult. You will get better results if you reveal this information early – before offers are put on the table. Doing this surprises the other side, causing them to doubt the quality of their preparation. If I can compromise your confidence in your preparation, I create doubt about the validity of your offer which was based on that preparation.

Ask Their Opinion Before Making Your Offer

Most negotiators can only ascertain the other side’s reaction to their offer after they have put it on the table. Once an offer is made, it cannot be retracted. Smart negotiators do all they can to test the other’s opinion before any offer is tabled. They create a conversation where neither side makes any commitments, they just share ideas and reactions to better understand each other’s interests and priorities. They might use a line like, “I’m not looking at any commitments yet, but how would you feel if we put this with this in a package that includes… “

Once either side puts an offer on the table bargaining starts – and information sharing stops. So, you need to get as much information as possible before you start bargaining.

Refer to the Authority and Influence of Others

It’s unrealistic to expect anyone in a negotiation to accept the other party’s figures, so you need to find an authoritative source you can both agree on.

If I try to change your thinking in a negotiation by confronting your ideas, it is likely you will just become more entrenched in your ideas as you argue against me. It has been shown that I can influence your thinking by pointing to the actions of others whom you see as similar to you. Identifying any such reference points is part of a smart negotiator’s preparation.

Tie-Together a Package with the Maximum Perceived Value

It is virtually impossible to negotiate a win-win outcome over a single issue. Use your preparation and your non-committal discussions with them at the opening of the negotiation to create an integrated package with the maximum perceived value; remembering that something that has high perceived value to them might actually cost you very little.

Conversely, there are many stupid negotiation behaviours.

Start Aggressively with Criticism

Some negotiators start out with the thought, “I’m going to show them what a tough negotiator I am.” Research has proven that when I perceive you as being competitive, I become more competitive, I am less likely to share information with you and I become less flexible with my offer(s). Not a smart way to start!

Table Your Offer Early

Moving too quickly into bargaining will limit the chances of finding the maximum possible value for a deal.

Undermine Their Offer and/or Authority

It’s okay to question their offer, but putting it or them down will only result in a negative response.

Play Your Cards Close to Your Chest

This is negotiation – not poker! Failure to share information (that could have in no way compromised either position) is one of the main reasons for poor agreements.

Irritate Them – To Get Them to Do or Say Something They’ll Regret

Only works with very inexperienced negotiators.

Demand Answers After You’ve Backed Them into a Corner

Okay, so you’ve out-negotiated them with you clever ‘traps’. Now you have someone who resents you and you have to work with them to make this deal generate value.

When negotiating, you have choices… choose the smart ones!