Negotiating Tactics

Found this interesting article and decided to put it up here so that it may be of help to someone:

1 BUILDING BLOCK TECHNIQUE

This can be used in several ways. You may request a price for only part of your actual requirements and in the face‑to‑face negotiation request prices for various quantities up to your actual needs. The other party will give ground more readily when you are raising their expectations.

If you are prepared to enter into a three‑year contract, negotiate hard for a one‑year contract and then ask what they would offer in addition if you went to two years. Having obtained further concessions, ask what they would offer for three years. You should get even more. If you go straight from one year to three years the concession you might have got for two years will be transferred to the three-year contract and the concession you might have got for three years disappears!

Some people ask for prices for quantities higher than those they require and then try to get the same price for the actual lower quantity. If this approach if used, then in a buy/sell situation the seller will feel cheated and resentful. He will feel 'cold' towards the buyer. The buyer's tactic might succeed once, but he will have lost the respect of the seller and the seller will look for ways to redress the balance in future. Moving to higher quantities than originally asked for encourages the seller‑who sees the prospect of more business than expected and can probably offer lower prices because of these higher quantities. The seller feels 'warm' towards the buyer.

2 RUSSIAN FRONT

You hint that failure to agree to a point (perhaps major but made to look minor) will necessitate reopening the whole range of aspects previously settled. The other party either agrees or faces a much worse alternative.

3 BACK BURNER

Putting off either to another meeting or to a later stage in the negotiation an item or issue that you had not planned for, giving you time to work out a position on the issue. This can sometimes result in the other party repeating all or part of their case and a comparison of first and second versions can prove useful.

This tactic can also be used where it appears that a particular issue is 'bogging down' the negotiation. Proposing 'let's leave that for the moment' can prevent this happening.

As the negotiation proceeds, the contentious issue often resolves itself and there is no need to revisit it.

4 HEADACHE

'Oh! No! Not today, I've got a headache!' Essentially this is an emotional appeal not to press a point, and designed to make the other party feel it would be unreasonable to do so. Who likes to be thought unreasonable?

5 LINKING ISSUES

This is a very useful tactic but it needs careful planning. It is essentially a way of creating movement by establishing a link between issues that had previously been separate. To introduce a 'contingent relationship' between two issues on which each side wants a settlement is a prime means of getting movement where there is apparent deadlock.

For example, in buying a car the seller may be persuaded to make a further concession if you stress that if you do buy that particular model you would get it serviced at that garage.

6 ATOM BOMB/ ARMAGEDDON

A suggestion that a failure to concede or drop a line that has been taken will lead to catastrophic consequences. This means using threats such as: 'This may only be a small order but failure to agree could affect all your business with the group'.

7 BROKEN RECORD

Repeating over and over again the point or demand you are making will sometimes win because the other party gets 'fed up' with its constant repetition, and feels that further progress appears unlikely until this obstacle is removed. It emphasises the need for persistence in negotiation and a refusal to accept 'no' at its face value without testing. Children use this as their main negotiating tactic with their parents!

8 TROJAN HORSE

Beware the Greeks bearing gifts! Be wary of the offer 'too good to refuse'. Look for any hidden problems or disadvantages. For example, avoid following the buyer who gratefully accepted the offer of fixed prices for twelve months only to find the market price subsequently fell!

9 CASINO

Suggest that the proposals made by the other party are a pure gamble and cannot be taken seriously.

Using phrases such as “You’ve got to be joking” or “Pull the other one” can do this. The implication is that if they are serious then there is no prospect of any deal whatsoever.

Remember‑do this with a smile and you are unlikely to cause offence.

10 MESSENGER

The implication is that some absent third party is responsible for the unpleasant point you are about to deliver, for example: 'I'm only telling you what the engineers say' or 'I'm under pressure to achieve a 5 per cent reduction in current prices.' You cannot be held personally responsible for the statement. It can also help in putting down a 'Marker' without being personally responsible for it. You can then more easily retreat from this position without losing credibility. This third party must be placed at a level where it would be difficult for the person with whom you are negotiating to make contact.

11 DEFENCE IN DEPTH

Using several levels of staff/management before the issue reaches the final decision‑maker. At each level it is hoped that additional information will be obtained. This must be done carefully so that you do not undermine your own authority.

Statements such as “Our normal procedure is ... etc”, can indicate that the other party will have to conform to this.

Do not confuse this with tactic 27, Third Party.

12 PDT ‑ PHYSICALLY DISTURB THEM

Using a variety of physical (non‑violent) means to throw the other party off balance, for example:

· Lean across the table‑invade their 'territory'
· Change the normal seating pattern
· Sit close to them
· Ask them not to smoke‑if you know they usually do.

All of these are actions that cannot be taken as hostile but can still unsettle the other party.

13 BRINKMANSHIP

Going right to the edge requires great skill to avoid falling over! One way is to try and get the other party to see the edge as being closer than it actually is. However, beware of bluffing ‑ if you are going to bluff always be aware of what you will do if your bluff is called.

14 NEGOTIATING BACKWARDS

It can be helpful to try to find out in advance where the other person would like to end up. This can avoid the resentment that could occur when you push someone beyond what they see as their limit.

15 SILENCE

At a recent meeting a manager had just made a superb presentation of his negotiating case to an opposing group. It was clear that the audience was impressed, but an uneasy silence developed as people looked at each other to see who was going to be the first to speak. Just as one was about to ask a question the manager began going over the key points again. This happened several times. If he had stopped talking and started listening he might have learned something!

Silence is a void and people feel an overwhelming need to fill it. However, we must learn to 'manage' silence. If you ask a question and get an unsatisfactory answer, the best thing to do is nothing at all ‑demand more information by remaining silent!

Many sellers, faced with silence, will go on offering concessions until they get a verbal reaction, for example: 'We could do X' – silence ‑ 'And we could also do Y.'

Use silence but also plan what you will do if it is used on you!


16 RECESSING

Seek an adjournment to consolidate, review and re‑calculate, or possibly reshape a deal. New ideas often emerge if a break is taken preferably away from the stress of the actual negotiation. It often forces parties to re‑consider their respective stances and question the reasonableness of the positions they have taken.

Recesses should always be taken when:

· Some complicated calculations have to be done
· The emotional temperature is rising
· You are negotiating as a member of a group and your team is 'beginning to fall apart'.

17 DEADLINES

These can be imposed or agreed and can encourage parties to concentrate on creative solutions but at the same time realize that concessions are necessary. Beware that this does not lead to precipitate solutions.

18 THE HYPOTHETICAL QUESTION – “WHAT IF. . .” OR “SUPPOSE .….”

It can be particularly useful for tabling a new idea or to help break deadlock. Matters can be discussed without the fear of commitment. The hypothetical question can, however, be a two‑edged sword, depending where it is used in a negotiation. If used during the exploratory/testing stage it can open up useful alternatives and help shape a deal. If used late in the process, when the basic framework of a deal has been constructed, it can cause frustration since one or other party may see it as a backward rather than a forward step, breaking the framework and implying that the process has to start again.

19 “WHY?”

Never be afraid to challenge the other party, especially at the earlier stage when positions are being defined. Where you are involved in an ongoing relationship you will acquire the reputation of someone who demands a well-presented case. The more detail put forward, the greater the opportunity to find a flaw that can be exploited to your advantage.

Use the 'Why' tactic judiciously ‑ if used too often to challenge every new idea or proposal it can cause frustration and inhibit the other party from putting forward alternatives. If you do ask 'Why' you may get some very good reasons which are difficult to refute, so you should plan for this eventuality.

20 TAKING THE TEMPERATURE

An informal meeting or contact can be used to test for views, positions, sensitivities, etc. Be careful to define the purpose of such a meeting ‑ do not reach a formal settlement informally!

21 PERSONAL FAVOUR

Essentially this is an emotive stance. Emphasize the trouble you personally went to for the other party, e.g. 'I had to work hard to get the partner to even look at your proposal or 'I had to make special arrangements to get your invoices paid in the time you wanted.'

Some door‑to‑door sellers use this, e.g. 'I only need to sell one more to win our competition.' The point is made that to ask for more or to refuse to buy would be unreasonable.

22 DUMBSTRUCK

Look astonished or even horrified, but say nothing! This puts the onus on the other party to explain or even excuse what has been said, weakening their case and also giving you time to think. More emotion is used here than in just remaining silent.

23 GUILTY PARTY

Make the other party feel guilty by suggesting that they are breaking some code or agreement, or that they are refusing something already conceded by other, more reasonable people. They may make a concession to convince you that this is not the case.

24 SALAMI

Feed a difficulty or 'nasty' in thin slices, piece by piece. This often produces concessions because the other party wishes to get away from an increasingly uncomfortable situation.

25 DUNCE

Undermine the other party's faith in his case by claiming that he has not done his homework and has got his facts wrong‑he was not well briefed. If this can be demonstrated it is possible to sow seeds of doubt about matters that have been prepared and are correct, thus sapping confidence and producing a feeling of inferiority. Be careful that you can substantiate any such challenge you make or your own credibility will suffer.

26 THIRD PARTY

State, at the end of a negotiation or at a crucial stage, that you do not have the authority to make a final decision. One can 'buy time' to consider the other party's case‑this will probably have been fully argued when this tactic is used. You can then consider counter arguments at your leisure. On the other hand you automatically undermine your own position for future negotiations, and may well be by‑passed in future.

27 GOOD COP BAD COP or Mr NICE and Mr NASTY

This is a tactic for team negotiations. One of the team makes very high demands at the start of the negotiation and indicates a firm stand. Before he loses 'face' by having to back down, another team member takes over and indicates a willingness to take a more reasonable attitude, often to the relief of the other party, though the initial high demands have reduced their expectations.

This obviously requires close cooperation and pre‑planning between members. If you are on the receiving end of this tactic remember that the objective of Mr Nice and Mr Nasty is exactly the same‑a good deal for them!

To prevent this tactic being used against you always establish the authority level of the person you are negotiating with. Ask the question 'If we reach an agreement can you commit your organization?' or some such question.

28 FULL DISCLOSURE‑OPENNESS

This depends very much on the atmosphere that has been created ‑ parties need to feel that they will not be exploited by the other and it can lead swiftly to an agreement which both consider good. This is often used when parties have been dealing with each other over a long period and trust has been established.

Remember‑trust takes time to build but can be destroyed very easily. Openness is demonstrated rather than stated. Beware of the person who uses phrases such as 'I'm now going to be totally open with you'‑they seldom are!

29 “ALL I CAN AFFORD”

This needs to be accompanied by persistence or the 'Broken Record' approach if the other party is to be convinced. If accepted, the result can be a mutual concentration on alternatives to enable the deal to be made within the limits stated. Do not over‑state your case and lose 'face' by having to back down.

30 'LET'S GO FOR LUNCH'

Deals can often be concluded when the atmosphere or surroundings are changed and a more relaxed and informal setting substituted. Less formal than recessing, and can be used by either party to the negotiation.

31 SIDE‑ISSUE OR RED HERRING

This tactic highlights a comparatively unimportant issue so that when finally agreed the other party feels that they have 'broken the back' of the negotiation and can relax.

When the real issue comes up it gets less attention, to the benefit of the party using the tactic.

32 DIVIDE AND RULE

Use this tactic when in a negotiation where you are facing a team of negotiators on the other side. By listening and observing you may pick up more positive or agreeable signals from a particular member. You can then concentrate on them as being more reasonable and supportive. Sometimes the team actually begins to argue amongst themselves‑listen carefully for useful signals.

If leading a team negotiation, make certain during the preparation that steps are taken to ensure you do not fall into this trap.

33 CHARITY

This is an appeal to the 'better nature' of the other party. It is essentially an emotional appeal to the other party as a person rather than as a representative of their organization.

34 DELIBERATE MISUNDERSTANDING

This is a particularly useful ploy to 'buy' time to think after a complicated proposal, case or explanation. 'Could you just run through that again?' either gets you time or discourages the other party from using such complications.

35 RE‑ESCALATION OF DEMAND

After conceding and moving towards the other party you then find they are unwilling to move and persist in pushing for more. You therefore indicate that you have moved too far already and must return to your original position or beyond. The other party will often agree the deal at that stage, fearing that what they have so far obtained may slip away.

36 'ONE MORE THING'

This can be used at the end of the negotiation, particularly if it has taken time to get this far. A further concession may be obtained, working on the basis that the other party will not want to waste what has been agreed. Use care as the 'one more thing' must not be so crucial that it leads to a reopening of the whole negotiation. However, it can get you just that little bit more.

37 THE INCORRECT SUMMARY

Summarize in a way that tips the balance just in your favour. If the other party does not object at the time they will appear unreasonable if they raise it later in the negotiation.

38 NEW FACES

Change to another team or refer to other individuals/groups. New faces need not be tied by what has been developed in the negotiation to date.

39 ONUS TRANSFER

Put the onus on the other party to come up with ideas, e.g. 'What must we do to enable you to reduce your price?' Sellers try to get the buyer's 'shopping list'. They then negotiate each item on the list in turn, finally asking for the order because they have agreed everything on the list.

Onus transfer enables the buyer to get the seller's shopping list ‑ what the seller needs to drop prices. The buyer can then negotiate in the same way to arrive at the price he requires.

REMEMBER

If you chose to use tactics and they are discovered you will damage the relationship by reducing trust.