Over the years, I’ve learned some great negotiating techniques and tactics. I’d like to share them with you – with the promise that you don’t use them against me because I’ll know what you’re doing.
The Invisible Man
One of my favorites is called the invisible man. That’s where you’re in the heat of a deal and you don’t want to give an answer right now, or you don’t like the position that the other party is taking. You just say “Well, I have to check with my colleagues before I can give you an answer.” Unfortunately that other party isn’t in the room.
By using this approach, you’ve pushed back the negotiation, you’ve bought yourself some time, and now you have the ability to go back to the other party and say “I know you wanted a 20% discount, but I’ve spoken with my colleagues and the best we can do is 10%.” You’ve created an invisible authority that the other party has to negotiate against.
The second technique is called the bogey. Act like something you don’t care about at all is really important to you. Then as you go through the deal, fight hard for that one point. This gives you the ability to trade it away later like you’re making a major concession but it doesn’t really cost you anything. You create negotiating leverage for yourself by making the other party believe they’ve won something big when instead you were able to extract something of true value to you.
The next technique is called the nibble. This technique is about taking a tiny bite right as time is expiring. At the last minute, right before you get a deal done, ask for something extra. Don’t go after something big enough to break the deal. But beware, this approach can upset the other party.
For example, imagine you’re out shopping for a suit. You buy two suits and you’re spending a lot of money. At the last minute, right at the register say “Well, you know what, I’ll buy the suits. Can you throw in a tie and belt?” The salesperson is looking at a really big commission and they’re not going to lose that big commission over a tie and a belt. It’s a small nibble right at the end.
High-Ball and Low-Ball
The next technique is called the high-ball or low-ball, depending on the position you’re taking in the negotiation. Start with an offer that’s ridiculously high or ridiculously low to cause the other party to re-evaluate their opening price. Now there’s risk in this one. It could backfire and end the deal immediately.
Another great negotiating technique is called future value. This is where you promise more value tomorrow in exchange for concessions today. It goes like this: “Hey, we want to do this deal with you but we want a much lower price. In exchange for that lower price, we’re going to create a long term, strategic partnership with you. In the future, we’re going to send a lot of business your way.” Here’s the thing. That business never materializes. To be clear – I’m not encouraging lying. At all. But if you intend to do future business with someone, make a big deal out of how big it could be.
Early in my career, I would accept these future value promises. I would make concessions on the promise of that future business. And so many times, I’ve been disappointed when it doesn’t appear. If you’re promised future value, beware of this dynamic. The best way to capture this future value is to build it into the contract and say “Fine, I’ll give you the concessions when that future business comes in.” In doing so, you’re protecting yourself from that future value approach.
Round and Round
The last technique is called multiple rounds. Every time you think you have a deal done, there’s one more negotiator they didn’t tell you about and you have to satisfy their needs. At each step of the way, that one additional negotiator wants a little bit more of a concession. I’ve been in several situations where we thought we had a deal done, and we got the “Oh… well… we have to kick it up to my boss…” That boss wanted another five percent, or two percent, or a rebate. After several rounds of negotiations, we found we had given up a lot of value.
You can use all of these techniques as you go through your negotiations. Each approach can be very effective. Each approach has their downsides. Be deliberate around picking the technique and understanding the risks that come along with it. Hopefully they’ll help you end up on the right end of the deal!
To learn more about anchoring and negotiating, check out our training course Everything is Negotiable. We’ll teach you how to get the most out of every negotiation you enter. You can also watch my new course Strategic Negotiation on lynda.com, which includes a free chapter on defining the context of your negotiation. Watch the course introduction here:
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