Negotiation Tactics – 10 Tips in Negotiation.
Here are my top 10 negotiation tactics, I’ve seen them being used to good effect, I can also remember when they have been used against me.
With a use of these tactics you can stand your ground against a skilled negotiator or use them to your own advantage.
Being effective in negotiating is an essential business skill.
1. Make the first move.
This may not be at the negotiating table, an indication of your desired outcome may be made in conversation, over the phone before your formal negotiations, this is a technique called pre-conditioning.
Experience shows that making the first move generally sets the ‘price’,
Setting the price will always draw your adversaries’ unconscious mind towards this direction. This works by creating a psychological anchor, this can obviously be for a higher or lower price it just depends what side if the negotiation you are on.
For example try asking something like this;
- “Do you think it costs more or less than (the anchor price)?”
- “Why they think you they should be paid more than (the anchor price)?”
2. Give Multiple Offers.
This gives the impression that you are flexible and want to get the deal done no matter what.
Flexibility warms your adversary towards you.
Additionally their response to parts of a multiple offer could show their preference and give away their negotiation strategy.
3. Be Price Precise.
Be precise with the price, don’t use a rounded number, this gives the assumption that any anchor price is a real price and not something pulled out of thin air.
e.g. £399 950 is better than £400 000 and you are more likely to get nearer to it than the later.
4. Always make an aggressive counter offer or perhaps an outright refusal.
‘If you don’t make the first move, it’s important to counter’.
Done well this deletes their ‘anchor’ that they have set and sets yours.
As a counter some negotiators go as far as an outright refusal.
A good counter may even make your opponent negotiate with themselves in effect doing your job for you.
After a strong initial offer and a counter don’t forget about the ‘Power of Reciprocity’, this is when you reduce / increase your initial offer in the hope that your opponent appreciates this gesture in the hope that they too will do the same and hopefully bringing you both closer to agreement. This is best done when your initial offer is totally unreasonable or when you deliberately offer something you know your opponent doesn’t want.
5. Counter offer no matter what.
Even if it is a dream deal, or you are simply forced to accept their offer, always demand further concessions from your adversary.
‘By accepting a first offer, your adversary will only regret their offer and think you can be squeezed further or squeezed to accept future concessions’.
6. Give and Take and ‘Calling their Bluff.
Even the best negotiators need to learn how to make compromises, but when forced to make a concession, make sure your adversary knows this and ask for reciprocal concessions from them.
‘Calling their Bluff’ If your opponent says for instance when buying your house that they can’t go any higher than £400 000 because the bank will not give them any more, you could call this bluff by responding that you can’t go any lower than £450 000 as you need the money as a down payment for your new house.
Your opponent will now either keep to the original offer, of if it is a bluff will hopefully start negotiating.
7. Break up the deal into smaller chunks.
This helps you to get back to your anchor price inch by inch, if not all the way.
“Perhaps that annual fee would be fine over the first 3 months and if we are forced to accept that we could only do that if we could then increase it to …….. over the next 3 months then………….” etc.
8. Don’t indicate you are close to a deal.
This will make a skilled negotiator push harder thinking you have what you want and you are feeling happier about things, they know then they can squeeze you a little more.
9. Have Patience and Sleep on it .
Be patient there’s little point in being rushed into anything, sometimes a skilled adversary will rush you into a decision, often statements like “I want to wrap this up today” can introduce time pressure.
A skilled negotiator may deliberately stall or delay especially if there’s a deadline,
Your opponent knows that you are unlikely to walk away from a deal after you have spent a lot of time working on it.
The Psychology here is that a delay or problems introduced by your opponent tends to make you more stubborn and more determined to make the deal work, perhaps by making more concessions.
A skilled opponent could make your bravado work against you by asking
“Have you got the authority to make the decision today?”
an in-experienced businessman would reply that they would be able to sign, therefore putting pressure on themselves to make the deal today or lose face.
Always take your time and think about your options, ask advice perhaps say that you need some time to talk about some of these issues to your other business partners.
Beware of ‘negotiator fatigue’ and rushing into things because you are worn down or tired, step back and sleep on it.
Have patience, remember deals are mutual agreements where both parties benefit, it is rare that offers of a deal are taken away overnight.
10. After the Deal
Some negotiators will continue to look for small concessions after the deal has been struck, this is called ‘Nibbling’.
After putting in a lot of effort in making the deal a Nibbler knows it’s unlikely you will then walk away and small concessions are still possible.
Nibbling can also be more common after a negotiator introduces a delay in the final sign off of the deal or quibbles on a small fact.
Follow this link to my other blog on Basic Negotiation skills