Wednesday, September 20, 2017

Professionals Adopt These 6 Powerful Negotiating Tactics To Win The Deal

Negotiating is one of those things that many people have a serious aversion to. Whether it's a fear of confrontation or simply the knowledge that they're weaklings who don't deserve to win, many people actively avoid situations that require negotiation or plow through them as quickly as possible, accepting the worst possible deals in exchange for getting it over with.

But it doesn't have to be like that. Simply by understanding the tactics actual professional negotiators use, it's possible to enter a negotiation with a little more confidence, and eventually get a better deal out of it.

So, whether you're buying a car, asking for a raise, or trying to get free guac with a burrito, here are the actual negotiation techniques used by the pros that might be helpful in your situation.

6. Naming the First Price

You might think you've always been told the exact opposite of this advice, especially if you've been reading tips on how to behave during a job interview, where you're likely to see some version of "Never mention your desired salary during a job interview, you colossal jackhat."

But that's not a negotiation; it's an interview, and when a manager is evaluating whether to hire you for a position, you want them to consider all of your best qualities, not your base ones.

But once they've decided that you're the one for them, or in any other context where you have something they want, that's where you enter the actual negotiation. Then, there is a serious advantage to naming the first price. This creates what's called an anchoring effect, as the price you name greatly influences all further negotiations. Some research has suggested that for every extra dollar included in an opening offer, 50 cents make it into the final agreement.

How to Counter It:

If someone opens with an initial price that seems far too high or low to you, you can assume the other party is anchoring, or just submitting a lowball/highball bid and not seriously negotiating. Your best counter is to actively, verbally call out what they're doing. Say that they've given you an insulting, unserious bid that isn't even worth considering.

By stating clearly that their bid isn't serious, you're making a claim that it effectively never happened, and thus you can restart the negotiations, this time with your own bid. A serious (but low) bid on your part can thus reanchor the negotiations on your turf. Or you could counter with your own unserious, ridiculously low bid, to show you're not going to be pushed around.

5. Changing the Subject

Negotiations don't always center on a single figure; often several different topics or figures need to be settled upon. A common negotiating tactic is to switch between different issues at specific times, like if the negotiation is stuck, or if one party feels it's going poorly for them.

A great example of this is when buying a car, which requires settling on the sales price, the down payment, the monthly payment, and the value of any trade-in. If you ever get stuck or refuse to budge on any issue while buying a car, the salespeople will quickly divert your attention to one of the other issues. They even have a very specific tool for this, called the four-square, which is just a sheet of paper divided up in four, where they walk through those four issues.

Let's say you refuse to budge any higher on the purchase price of a car and are about to walk out of the negotiations. That's when the salesperson bounces you over to discuss the size of the monthly payment you think you can handle, or any down payment you might have. By the time you get back around to the purchase price, you will often find you're far more willing to compromise than you were before. The reason for this is that the deeper into any negotiation you get, the more likely you are to want to finish it.

How to Counter It:

Stick to one subject at a time. Using the example discussed above, you wouldn't let yourself move away from the purchase price until it was settled, or better yet, arrange to finance elsewhere, and don't even mention that you have a trade-in.

4. The Fake Sticking Point

This tactic involves one party making some issue seem particularly valuable to them, even though it isn't really.

The talking up of that issue is done with the full intent of later conceding it, in the hopes that the other party, thinking it's valuable, is more likely to give up something genuinely valuable to them in exchange.

How to Counter It:

Well, you could always try simply ignoring or not giving a flying damn what's important to the other party and enter a negotiation considering only what's valuable to you. That might not be possible in some very contentious negotiations, like labor talks, where neither party can really effectively "walk away" from the table. In cases like those, where both parties might have to trade genuine concessions, the only solution is to do substantial research on the other party's position to get an idea of what is actually a painful concession to them, as well as what they could feasibly do without.

3. The Higher Authority

With this tactic, at some point during the negotiations, one party will declare that they don't have the authority to make a deal at such-and-such a price and have to check with someone more senior. This is another favorite of car salesmen, typically expressed in the form of "I'll have to check with my manager." Here's William H. Macy working it like an old pro in Fargo:

This tactic serves two purposes. First, it slows the negotiation down, with the assumption that the other side will fatigue and eventually accept a worse deal, as discussed above. Second, it allows the point negotiator to remain the good guy. We are always more willing to do favors and be accommodating to people we like, and if we like the guy across the table from us (because it's his boss saying no, not him), then we're more likely to eventually let the poor guy have his way.

How to Counter It:

In business contexts, if someone tries this, you basically just stop negotiations until you're dealing with someone with actual authority to negotiate. You can try the same when buying cars, although you're unlikely to actually meet the manager, or even to deter the tactic from being used.

More fundamentally, this is again a matter of fatigue, and to fully counter it, you'll need to develop your negotiation endurance. Ideally, you want to make the other guy the one who just wants to get the deal over with. So clear your calendar for the day, stay hydrated, and remember that an extra hour of your time is probably worth a few hundred dollars.

2. Know What Your BATNA Is

The best alternative to a negotiated agreement, or BATNA, is essentially what you would get if the negotiation falls apart. If at any point during the negotiation you feel you're not going to get a deal better than your BATNA, you'd walk away. And if you can get something better than your BATNA, you'd probably take it. Understanding your BATNA, and having a good idea what the other guy's BATNA is, is probably the single most important thing you can bring to the table.

For example, let's say you're selling your Jet Ski to some dude.

If you've had lots of interest from other parties about this Jet Ski, that means that if your negotiation with John-Jim here falls apart, you can always try to sell it to the next guy, or the guy after that, and you'll eventually get something pretty close to the fair market price for it. Your BATNA then is the fair market price for that Jet Ski, minus however valuable your time is (because it will take longer to sell it). If Ted-Tom here offers something way less than that, you can tell him to take a hike and still come out ahead.

But if there's no one else interested in your Jet Ski, thus effectively giving it a fair market price of "zero," you'd be better off taking whatever offer Bruce-Bruce here gives you.

How to Counter It:

This is all prep work. Do your research on both your own and the other party's position and come to the table prepared. You'll also benefit if the other party doesn't know your BATNA, and you can try dropping hints that would skew the other party's perception of your position, although that's usually pretty transparent.

1. The Late Nibble

One sneaky, hate-filled tactic occurs when a negotiation is seemingly settled and one party tries to reopen an issue that has already been agreed upon or add-on "one more thing." This is called a nibble, and it's essentially just another play on fatigue, one party cynically hoping that the other will say "fine, whatever," just to get the deal over with.

How to Counter It:

Call this one out. If the nibble was actually something of value to the other party, they'd have brought it up long before. Mention that reasoning to them using your most childish, sing-songy voice.

Also, if they had agreed on a price prior to attempting this extra nibble, that price is almost certainly better than their BATNA. So threaten to walk out if they don't remove the nibble. This is one time you can be pretty confident that the deal on the table is better than no deal at all for them, which is the best possible time to make a threat to walk out.

Chris Bucholz is a Cracked columnist and has danced like a pretty, pretty boy to close a couple deals. Join him on Facebook or Twitter to receive more of his wisdom.
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