TRICKS OF NEGOTIATING

Powerful Negotiators come prepared with an arsenal of gambits. If you are a negotiator, the knowledge of these gambits would help you seal the deal in your favor or protect your interests if someone uses them against you.

There are different Gambits for different phases of the negotiation,

Beginning Gambits – Opening Moves you can use to secure a strong foothold at the start of the negotiation

Middle Gambits – these help you move the negotiation in the direction you want it to go

Ending Gambits – enable you to seal the deal in your favor. 

Beginning Gambits : 

• Ask for a better deal than you expect to receive. 

Say, you want to buy a car, and the salesperson puts up an offer to sell it to you in 5000 BHD.

But your goal is to bring him down to 4200 BHD. To start negotiation you have to put up an initial offer, how much should this be? The answer is - you should ask for a better deal than you expect to receive. You know that whatever initial offer you make the salesperson is going to push it back. The closer your initial offer will be to the sale price, the lower will be your negotiating space. Negotiating space is the difference between the sale price to your initial offer. Try to keep the negotiating space as wide as possible, and you will have a better chance of reaching your target price of buying the car.

Eg. – if you make an initial offer of 4200 BHD (which is your target price), you will most likely end up paying more than it.

But, if you chose to make an initial offer of 3600 BHD, you have a better chance of getting your target price. 

This gambit works beyond the sale transaction. For instance, if you are negotiating contract conditions or scope discussions with an agency, you could start with much greater demands than you expect other side to grant.

• Playing the reluctant seller or buyer.

To play this gambit, you have to pretend that you are less eager to buy/sell a product/property etc. because it has less sentimental value to you, or you don’t need the product as such or the deal is not going to benefit you much. This way, you can narrow the negotiating range/space in your favor. The more you convince the buyer/seller your reluctance to buy/sell the less likely they’ll be able to low-ball you in their initial offer.

• Flinching

Negotiating involves a fair amount of bluffing, as witnessed in the beginning two gambits.

Flinching is another gambit which you can use to bring the seller/buyer to your desired negotiating space/range.

Eg. – using the same car example, suppose the seller given you an initial offer of 4500 BHD, and you act visibly shocked that he would propose such a number – even if it’s entirely reasonable! If you are a good enough actor, he might respond by lowering his asking price. Even if you don’t get that lucky, you are clearly communicating that the price is unacceptable to you.

In contrast, if you don’t flinch, the seller may interpret you neutral body language to mean that the price doesn’t seem much high to you. This might lead him to stick closer to his initial offer.

• Vise technique

Always let your counterpart in the negotiation to make their initial offer first. In response to their initial offer, you could say – “you can do better than that”, this will pressurize your counterpart to respond with a better/lower offer, which will be the new Initial offer, or they could pass the ball back to you saying- “how much better should I do?”. Now you should be ready with an initial offer that will establish the negotiating range, and is in your favor.

 Note : Never accept the other side’s initial offer.

Middle Gambits:

• Taper your concession during the middle phase of negotiation

You have gone past the stage where the initial offer has been made, and now the seller wants buyer to go up and the buyer wants the seller to come down. Consider example of buying a house – the seller wants to sell at 150,000 BHD, you decide to bring the price to 120,000 BHD(your target price), so you make an initial offer to buy a house for 90,000 BHD. Now let’s say the seller comes down by 10,000 BHD. To maintain the bracket you must only go up by 10,000 BHD. If he comes down by another 5000 BHD, you should go up by no more than 5000 BHD.

This brings us to an important caveat – make sure the concessions are not of equal size, and in no case your last concession should be a big amount. You should always taper down the concessions into smaller and smaller amounts.

If you gave up three concessions of 10k BHD in a row, it would take you to your target price of 120k BHD, but now you’d have to slam brakes and tell seller you can’t go any up from here. This is not going to seem convincing on the other side. After all, you gave up 10k three times in a row. Surely if you’re happy to give up such large amounts, you’d be willing to come up a few thousand dinars more.

If you concede 10k, 8k, 6k, 4k, 2k to get to your target price of 120,000 BHD from initial offer of 90,000 BHD, you’ll create a much stronger sense that you are reaching your limit.

• The Trade-off gambit.

Never make a concession without asking for one in return.

For example you want to rent an office space and you give a concession to the owner that you would be paying the entire year’s rent at once (Great for the Owner's cash flow). Now, you should always ask the owner what he could give you in return. It could be a discount on agreed price or extended stay in the office or free cleaning once a week, free internet anything. But, instead of asking first, you should allow the owner to make a proposal, may be you will get a better deal out of him than you were expecting.

Trade off gambit also pays in the long run, as the other party will now know that they will not get anything out of you without giving something in return, they will be judicious and restrained with their requests in the future as well.

There will be cases when the client asks a concession from you and when you try to look for a trade-off concession you can ask in return, you hear a straight NO. It may appear at this moment that the negotiation has truly hit the wall. How do you break through it?

If a negotiation gets bogged down, be prepared to call a third party into the negotiation of even be prepared to walk away!

When you get stuck in a negotiation, one option is to bring in a higher authority into the picture, it could be your manager. If the other party is not trusting your words, he may take your manager’s words more seriously. Consider a situation where a buyer asks you for a favor, outside the terms of the deal, and is not willing to give any concession in return. You can invoke the higher authority gambit and say – I’m not sure if I can get my people to agree to this deal without charging extra for the favor.

This way you can either buy time or fend off the favor by not spoiling your relation/position in the negotiation, after all it’s not you who is rejecting, it’s the people in your company. You are just a messenger!.

Try keeping the third party of  higher authority vague. If you say your boss/manager will not allow this favor, the client might ask if they can directly speak to the higher authority. This way you will be inviting the client to cut out the middle person in the negotiation, which is YOU.

Be Prepared to walk away from the deal if the terms are truly not acceptable to you.

When the client really pushes hard a condition that is truly unacceptable to you and you cannot find a way to work around it, be prepared to walk away from the deal, and project your ability and willingness to do so. One simple way is to make it clear that you have alternate options, and you have other prospective clients to whom you can sell you product and you don’t need to make this deal with this particular client.

Projecting walk away power is one of the most effective ways to strengthen your hand as a negotiator. If the other party senses that you have this power, and if they really want to make the deal they will be reluctant to push you so far and ruin the deal over a few conditions or concessions. If, however, the client senses you are unwilling to walk away, they will be much more inclined to stick to their guns and push their luck. After all, if it seems like you need to make the deal, then it’s reasonable for them to assume you will eventually cave in.

• Set Aside Gambit

The idea behind this gambit is that when you reach an impasse in a negotiation, you can set aside those particular conditions in the deal and come back to it at a later stage. For example, your trying to sell a complex engineered system to a client and the client does not agree to the engineering time frame for the system, you try to convince them that it’s not possible to complete engineering in a time that he says, but he won’t budge.

There will still be a wide range of conditions and other issues on which you can probably reach an agreement say – specification of products, payment terms, execution & commissioning timeline etc.

With that in mind you should set aside the issue that is the sticking point and focus on other ones where you find a common ground. After all you can circle back to the sticking point at the end of the negotiation.

This is a great strategic move one should deploy in the negotiation. Having worked through so many other issues and getting so close to the finish line, the client will probably be reluctant to lose the deal over a single issue of engineering time frame. He most likely would not like to move away from the struggle empty handed and feel like his time and efforts were for nothing.

Add an extra sense of goodwill at this point of the negotiation and the client would be much more receptive to making a compromise.

End Gambit:

• Nibbling

To pull this one off, you have to wait till the final moments of negotiation, and then, right when it feels like you have reached a deal, you ask for one last little concession or two.

For example if you are about to sign a 20 million BHD deal for a complex engineered system at a site, you could nonchalantly ask the client for car parking spaces at site or even a store or office space for your employees. At this point the client may feel like he has successfully made the deal for his purpose and they’ve put in a lot of effort together to come to a conclusion, and so may provide you with a small concession so both parties can get away with smiling faces. Last minute nibbling could save you a lot of money for an investment of very little time, so never consider this unnecessary.

Of course on the other side the client may also try to use this gambit on you. If you are selling something, one way to protect yourself is to list out the cost of extras you think that the client may ask of you and show them to the client ahead of time. This way you will preempt them from trying to ask for those extra benefits for free at the end of the negotiation. Another method is to use the higher authority gambit.

Last Advice :

Remember that money is money.

When negotiating deals that involve large sums of money, it’s common for people to fall into the trap of thinking in terms of percentages rather than absolute numbers. For example, let’s say you are about to sell your product and are going to sign a contract for 10 million BHD, and you can get the other side to pay 10.05 million BHD, just 50,000 BHD more. The extra amount is just 0.5 % of the deal amount, so it doesn’t seem like a big deal if you look at it that way, and its easy to let go of. But if you spent even 1 day convincing the other side to pay that extra amount, that would be really worth the effort and possibly you could get a lot of money for a small amount of time. Just imagine, if you had a job that pays 50,000 BHD per day!!