If you make an offer, then any response other than an outright rejection means there is room for negotiation.
What Type Are You
Three types of people.
- Accomodators
- Assertive
- Analysts
When it comes to negotiation, the golden rule is wrong!
Understand your counterpart’s type, and interact with them the way they would prefer, not how you would prefer.
Go to http://info.blackswanltd.com/3-types for more on the types.
Analyst
Very methodical. They don’t rush. But their style of speaking is often cold and not soothing. To avoid surprises, they will research for two weeks to get data they could have gotten in 15 minutes at the table. They hate surprises. They really want to be prepared. Asking them too many questions is a bad start - they don’t want to answer without knowing all the implications.
Hypersensitive to reciprocity: If they give you something, but don’t get anything in return soon, they lose trust and disengage. They feel talking to you at all is a concession. They evaluate all of your concessions and are thus slow in counterproposals.
They like silence to think. Give it to them.
If you’re an analyst, you should be worried about cutting yourself off from a source of data: Your counterpart. Most important for you: Smile when you speak, whic is also useful to mask moments when you’re caught off guard.
They interpret silence as “the other person is thinking”. Time means preparation to them.
Accomodator
As long as there is free flowing information, they are happy. They aim for a win-win. Very effective at rapport building without accomplishing anything.
Very likely to yield a concession in the hopes the other side reciprocates. Wants to remain friends even if there is no agreement. Very optimistic, distractible and poor time managers.
Be sociable and friendly to them. Listen to their ideas and ask calibrated questions - especially on implementation. Find ways to translate their talk into action. Because they are eager to please, they often promise what they can’t deliver.
Uncovering their objections can be difficult as they do not like to disagree.
If you are an accomodator, do not sacrifice your objections. Your counterpart wants to hear it.
They interpret silence as anger. Time to them is relationship building.
Assertive
Self image is linked to how much they can get done in a period of time. Getting it done is more important than perfection. They love winning above all else - at the expense of others. They have an aggressive communication style - they don’t care about future interactions.
Assertives really want to be heard. They will not listen to you until they know that you’ve heard them. They focus on goals and not people. They tell rather than ask.
You must convince them that you’ve understood them.
To them, silence is an opportunity to speak more. Mirrors work well with them. As do calibrated questions, labels, and summaries. “That’s right”, “Exactly”, “You hit the nail on the head” are common responses when you are on the right track.
If you give something to them, they’ll believe they earned it and won’t reciprocate. They’ll look for ways to get more. If they give something, they’ll count the seconds before they get something in return.
They often come off as overly harsh without sounding that way.
For them, time is money. They treat silence as the other party having nothing to say and a signal that the other wants them to talk more.
Taking a Punch
Experienced negotiatiors often lead with a crazy offer. It works as an anchor. Their counterparts often end up at the edge of their ZOPA.
You should prefer the other side makes the offer first, and assume it is extreme. It reveals their hand. Don’t get fazed by it. Say “No” in the ways mentioned in the previous chapter. Or deflect with “What are we trying to achieve here?” Or say “What else can you offer to make that a good price for me?”
If they push you to name a price, talk about what someone might charge (usually a very high number). Example, “Well if you want to learn this by taking a Harvard course, they’ll charge…”
Punching Back: Using Assertion Without Getting Used By It
If there is no progress, you may need to make an aggressive move.
Expressions of anger can sway the other side to accept less. But it can also reduce their cognitive activity, setting them up for bad concessions that lead to implementation problems.
Faking anger leads to distrust. It should be real, but it should be under control. Show anger at the proposal, not at the person. This is strategic umbrage. People on the receiving end feel they are over assertive, so it may be used against you.
“Why” Questions
“Why” makes people defensive. Use it to get people to defend your position. “Why would you change your supplier to me? They’re great!”
“I” Messages
Use “I” to set a boundary without confrontation:
“I’m sorry. That doesn’t work for me.”
To counteract bad behavior: “I feel … when you … because …” (essentially NVC style communication). Do not say it aggressively but in a cool and level manner.
No Neediness: Having the Ready-To-Walk Mindset
You must maintain a collaborative relationship even when setting boundaries.
The person across the table is never the problem. The issue is.
Punching back is a last resort. Before that, suggest a time out.
Ackermann Bargaining
This is useful against “hard-ass” negotiators: People who are used to getting their way. Might be useful in general, too.
- Set your target price.
- Set your first offer at 65% of your target price.
- Calculate 3 raises of decreasing increments: 85%, 95%, 100%.
- Use empathy and different ways of saying “No” to get the other side to counter before you increase your offer.
- For the final amount, don’t use round numbers.
- On your final amount, throw in a nonmonetary amount to signal you’re at your limit. Why not do this earlier?
This tactic uses reciprocity, extreme anchors, loss aversion, etc.
People who extract concessions often feel better about the bargaining process than those who get a “fair” offer (even a better one).
If you feel you’re in control, it’s OK to bend the rules - like making a 2nd offer without a counter.
You can tactically use a mislabel: “It seems like you would rather run the risk of keeping the place unrented.”
Key Lessons
Don’t fear conflict. They are the path to great deals.
Prepare in advance:
- Goal
- Labels
- Calibrated Questions
- Responses
- Prepare for the punch!