In this 2,500 word article, Paul displays 9 traits of effective negotiators illustrated with some real examples and stories. You may never want to use them yourself when negotiating, that’s your choice, but beware…they’ll be used on you.
All good negotiators aim to put pressure on the people they’re negotiating with. The pressure is designed to make them give way to your demands or requests or at the very least, to offer concessions to their requirements.
So whenever you’re negotiating, try to think about some pressure you can create. Effective negotiators don’t pile on the pressure with aggression or games, they create it purposely and cleverly. And the two greatest techniques they use are time and their own Inner Game control.
Time or lack if it, is the one pressure that all negotiators use. I like to buy my goods towards the end of month when most salespeople’s commission periods are ending. They want to get as many sales as possible in the last few days of the month to secure big fat commissions. So I like to negotiate for dishwashers, TVs and such around the end of the month to create this pressure.
Recently a brilliant example of time-pressure negotiating occurred in the English Premiership Football League and the pressure created earned one side £20 million. Not bad. The Premiership operates a transfer window of about a month where clubs can buy and sell players, they are not allowed to deal with players outside of the window.
This creates pressure in its own right and this year Liverpool and Chelsea played out a cracker. The player, Fernando Torres, Spanish International extraordinaire was put up for sale and Chelsea said they were interested. They offered £30 million. Liverpool gave a great verbal and visual flinch to this offer, giving the impression they weren’t interested.
And the player was now not for sale, classic example of not being desperate either. They waited, and waited until the last day of the transfer window appeared. They demanded £50 million. They patiently awaited Chelsea’s response. Chelsea, whose season was crumbling around them, were very keen to secure a player of Torres’s undoubted scoring ability, felt the pressure. The clock ticked away as clocks do and sure enough at 5 minutes to midnight on the last day of the transfer window, the pressure became too much and they caved in, agreeing the asking price to Liverpool.
Just before midnight the deal was sealed and Torres exchanged hands for £50 million, and a mere £20 million more than Chelsea started out at. That’s pressure for you.
The other form of pressure comes from within. Good negotiators learn how to control their Inner Game and the pressure this puts on you to secure a deal at all costs. One of the best ways to do this is not to “cross the line”. In other words, convince your brain that you need the deal and now. Do that and you’ve crossed the line and have to do a deal. That makes you negotiate less effectively because the slightest amount of pressure put on you by the other side will make you cave in.
A strategy to use here is the BATNA, the best alternative to a negotiated agreement. Have a plan B up your sleeves so if the deal isn’t looking good, you can calmly walk away. Always have your walk away power. Poor Chelsea didn’t have this power and therefore caved into Liverpool’s demands.
2. Increase desire
This is a selling skill as well as a negotiating tactic. Simply to increase the desire from the person you’re looking to negotiate with means they might be more inclined to accept your terms or to reduce their demands.
Our Pedigree dog Brodie has just had pups and we’re in the process of finding good homes for them, for a small fee of course. We’ve generated quite a bit of demand with our website (www.spinonepuppies.co.uk), an entry in the Kennel Club site and a Facebook page. We’re currently arranging for visits and such from prospective new owners and this is becoming a logistical nightmare.
This morning I suggested to Claire that we hold an open day on a specific Saturday between 9am and 5pm for all prospective people to come visit at a time to suit them.
We used to do the same in the estate agency business and it worked on a logistical level but also on a psychological plane. People saw other people being interested in the same house and this created demand for the product. We were a bit naughty because we often invited friends and family over to increase the numbers of people in the house. And I even heard of a tactic where specific appointments were made for viewers and the appointment times would clash, so as we were showing someone around the house, someone else would turn up to view as well. Bit naughty that one, I totally condone that tactic, but remember it in case someone uses it on you, and they will.
When I explained the tactic to Claire with the puppies, she was horrified and needless to say, we’re not doing an open house for the puppies. Besides all the people traipsing through would upset Brodie.
3. Have a structure
Powerful negotiators know that a process, a structure is what’s needed in negotiation. Even the smallest deals, those lasting minutes, should follow a process. The structure is even more vital for those long drawn out negotiations. In your structure you should factor in preparation, good negotiators do.
Last year, I had a call from a Middle Eastern company asking if I would do some talks over at their Institute later in the year. Naturally I said yes, it was a privilege, and then fixed up a negotiation call to thrash out the contract and terms.
Now I knew nothing of them, searched the web, still unclear. How could I negotiate with an organisation I knew nothing of, so I hired an Agent in the country, who was happy to take a cut, but assured me he could conduct the negotiations for me as he knew their culture and he could research the Institute.
He reported back. Good news. They were a massive Government organisation with budgets for foreign speakers, very keen for UK based speakers as well. He even offered to negotiate for me as he spoke the language and knew their customs.
As a result we negotiated a very good deal for both parties, without the inside knowledge of my agent I doubt if I would’ve negotiated such a deal, which brings me onto the next characteristic – a desire for a win-win result.
4. Desire a win-win
Winning at all costs, beat the competition, grind them down, hammer out a cracking deal regardless, pull the wool over their eyes…just annoys people, if you want a long term deal, win-win is the only way.
OK, both parties won’t have what they both want entirely. Both parties should achieve most of their aims and have conceded a little as well, but both parties must feel they have come out in a win-win situation. This is why preparation is so important for both sides.
Knowing the minimum you’d accept, your ideal position and a middle ground of what you’ll be happy to accept, helps with a win-win. Since both parties are able to concede in certain areas, give in others, means ultimately both sides get some benefit.
5. Build trust
Effective negotiators have trust on their side and work on providing trust in the dealings with the other side. Trust comes from rapport, working together, having a believable proposition, actively seeking a win-win, being open, inclusive, sharing.
Trust comes from following a structure which includes an initial discussion where both party’s shopping list is put on the table without any negotiation at that stage. Open questions to seek out what they’re looking for to build trust. With trust comes open negotiation.
The greatest hurdle to a successful outcome is risk, where there’s no trust, you see risk and this causes less concessions and more focusing on one or too variables, such as price.
6. Know that people always want different things
And sometimes to be a great negotiator you’ve got to find out what these are. Yes they’ll tell you their main needs and demands…but have you been able to get the smaller less tangible needs from them.
A few years’ ago I decided to cancel my gym membership and take up jogging in the countryside surrounding my home. This is a great tactic in the summer months, not so good in the dark and dismal winter. So I found myself out running during the day and the time needed – hour plus shower time – clashing with other family demands on my time.
My wife began putting pressure on me to do other family tasks and my runs took a back seat until I realised that my wife wanted different things.
I offered to take our dog Brodie along with me on my runs. Most of the way is fields and footpaths, totally off road, so Brodie could run alongside me and then run off across the fields. A little bit of training from my part and this could work.
The outcome? My wife is totally happy now for me to go running any time during the day as long as Brodie comes with me.
You see people want different things. Effective negotiators seek out these different things and offer concessions or extras particularly if they have no cost to them but give massive value to the other side. Taking Brodie on my runs costs me nothing, apart from some training, but to my wife this offers huge benefits.
7. Always get a concession
The rule that powerful negotiators use is to always seek a concession whenever they give something away. This should become a habit.
Always seek something, however small, when offering a concession. So the phrase “If we do this, then would you do this”. It’s a habit thing.
Just before Christmas, I was instructed to book up a Boxing Day treat for our 12 guests and the treat was Rubber Tubing at our local ski centre. The idea is you jump on a rubber tyre that goes hurtling down the ski slope at ferocious speeds.
I wanted to book 12 places at 12 o’clock noon. Bearing in mind we had free snow all over the county at the time and the forecast was for more, the allure of the ski slope was not as magnetic as normal.
They wanted a deposit to secure the booking which is normal practice, but I found myself saying “ok, I can give you a deposit, but what sort of discount can you offer me if I do so?”
It worked. She gave me a 10% discount just for asking, where thousands of people don’t.
Remember always seek a concession if you give something away.
“Can you pay by card sir?” “I can, but what discount can you give me if I do?”
8. Believe in uncomfortableness
All good negotiators tell me that when they are negotiating well, they have an uneasy sense of uncomfortableness. That feeling in the tummy when you are worried about what someone thinks about you, whether you’ve overstepped the mark, asked for too much, about to be thrown out of the store. Only then do you know that you are truly negotiating.
So welcome the feeling, seek it out and remember all good negotiators feel unease and uncomfortable.
Last year I wanted to take on some actors for some training I was carrying out for clients. The firm was recommended to me but their fee was slightly more than my client had budgeted to pay. We talked about concessions and things I could give that cost me little but provided value to them and we started the final negotiation…on email.
I didn’t think it was possible but we did it. At one point, following a request with a small concession in return, the other chap emailed back to say he was going to think about it and would get back to me. Of course it went quiet; having no emails coming back meant it was seriously quiet. Time trickled on as it does creating pressure and I began to feel very very uncomfortable.
Had I gone too far, asked for too much, could he refuse the work, had he a walk away plan B – his BATNA. I did, but time was getting close to the seminars and securing another firms’ services would have been tricky.
Boy, was it uncomfortable and didn’t feel good at all. But I knew that uncomfortableness was deliberate and it meant we were negotiating. He came back later, accepted the offer and we moved the sale to the next step.
9. Higher Authority
Seasoned negotiators realise that pressure is a strategy that brings results and the more pressure you can put on the person without losing trust and rapport, the better. And that’s the fine balance – pressure and trust and rapport. So if we personally pile on the pressure we might lose the trust.
The answer is to relate the negotiation to some form of higher authority. Someone who has the say to approve or disapprove the negotiation outcome. This can be an ego thing since most people like to think they have the power but the higher authority is merely a tactic used.
Car booting is a major enjoyment for me and I love selling our wares on the stalls. Someone asks me the price of an item and I refer to the ticket on the item and that becomes the higher authority. Other stall holders when asked the same question, look at the person, look at the item and then apologetically state the price that they’ve just made up. No wonder people negotiate the price down in these circumstances
Anything or person or committee that you can refer the details to becomes a higher authority that you can bring in to put pressure on the other person without losing the trust you’ve built up.
Principles and values can be used. When clients ask me about my fees I sometimes refer to fee integrity and having a common fee structure for all clients, which is true.
Your higher authority can also be a bad guy and you remain the good guy. This puts extra pressure on. We had some major building work completed recently and our builder was always coming to me to suggest short cuts or mention other problems that needed fixing. My higher authority was my wife and I would refer to Claire whenever Norman wanted something I didn’t want to give him.
Because Claire rarely saw Norman, I painted the picture of her being a hard nut to crack. “Claire won’t like that Norman, but I’ll check later”. It worked.