Secrets of Power Negotiating
A few weeks ago I was recommended Roger Dawson's Secrets of Power Negotiating, and decided to give it a try. I was pleasantly surprised to find that it is full of practical tips and helpful pointers about negotiations of every type, be it salary increases, house purchases, and even negotiations between countries (especially helpful if you're eyeing some islands in the middle of the atlantic).
What I especially liked about this book is that it contains useful information, examples and techniques without veering into the all-too-familiar territory of most self-help books nowadays, which is to inundate the reader with a series of irrelevant or inapplicable anecdotes about how people who used technique X became rich and handsome.
I've attempted to summarise a few of the techniques in the book, partly as an instruction to people whose negotiation skills are weak, partly as a taster for the book, and partly as a reference for my own use.
UPDATE: Roger Dawson personally emailed me to thank me for the mention, what a classy guy. I'm only recommending the book because I really think it's useful, though, so I don't really deserve thanks.
The first thing you need to realize is that people don't always want the same thing. You might not even have to negotiate if you can find what the other side wants. Often, people will find that they are offering one thing (e.g. money) when the other side is interested in another (e.g. boosting their reputation). If you identify what the other side wants, you can offer it to them, which will increase your chances of striking a deal. For example, someone might not be interested in money to sell their land for a mall to be built on it, but they might be interested in having the mall be named after them.
The following are some techniques you can use while negotiating, along with a brief explanation on how each technique works.
Nibbling. This is the principle of getting something extra, after everything else has been agreed upon. For example, you agree to buy a couch for a price, and then say "can you throw in that pillow as well?". The other person has made up their mind, so they're more receptive to adding something extra.
Higher authority. Always have a "higher authority" that you have to "check with" before you can make a decision. This ensures both that you will have more time to think about the deal, and that you will be able to put more pressure on the other party without leading to confrontation (as you do not appear to be the one responsible for the pressure).
Good guy, bad guy. This is the well-known technique of saying "I think this is a great offer, but X doesn't think so", and can be used effectively with the higher authority technique.
Impasse. If the negotiations reach an impasse, you can try to set the specific matter aside and talk about the other points of the negotiation, even if they are the minor ones. This establishes momentum and makes it easier for both parties to settle the point they were at an impasse on earlier.
Agree with people. No matter what peolpe say, agree with them and then gently nudge them to another direction. Arguing makes them go on the defensive and impedes the negotiation.
Flinch. This one is self-explanatory. Always flinch and act indignant at the first offer, no matter how good it may be. This leads the other party to believe that the offer is not good enough.
Play dumb. Don't show your hand, it's better to play dumb than to flaunt your intelligence to the other party. This makes them underestimate and sympathize with you.
Be prepared to walk away. Once you decide to close the deal at any cost, you have lost the negotiation. Always be prepared to walk away.
The power of writing. Seeing something in writing is much more powerful than just hearing about it. Always use writing (the more official-looking the better) when possible.
Don't make the first offer. If you make the first offer, you're revealing the range you want to go for. Always let the other person make the first offer, if possible.
Congratulate at the end. Never gloat after a negotiation, congratulate the other person and make them feel good about the negotiation.
Be the one who writes the contract. Try to be the person who writes the contract. This allows you to add a few details that the other party has to negotiate out of the contract afterwards.
Fait accompli. This is the principle of sending the other party a proposal with the assumption that they are going to accept it exactly the way it's written. For example, you can send a contract and a cheque to the other party, thus putting them in the position that they have to either decide whether to take the slightly modified offer, or come back to the negotiation and draw it out, risking failure.
Think in real money. Convert quotes to scales that make sense. If, for example, someone quotes you a price in cents per day for a contract that will last for years, it can add up to a significant cost increase. Always think in terms of real money.
Red herring. Add terms to the negotiation that you don't really care about, just so you can give them away later to gain something else from the other party.
Puppy dog. This is the practice of letting people try products before buying them, at which point they will be hooked to the product and have a much higher chance at purchasing it. Try to make people think about the benefits of the deal in the long term, this way they will be more likely to forgo the short-term costs.
Reluctant buyer. Act like you aren't very interested in the offer. This gives you leverage.
Want it all. Ask for as many things as you can, even things you don't want. This way, you set the other person up to "win" by making you relinquishing terms you didn't even care for. It also helps you get more things than you initially planned for.
Don't split the difference. Never split the difference yourself, but always try to get the other person to split their offer. This way you can split the difference over and over again on their end without relinquishing anything of yours.
These are the points in the book that come to mind. I haven't explained them in nearly as much detail as the book does, and I haven't provided ways to counter each technique when other people use it on you. So, if you felt that this list is interesting, I would urge you to buy the book. I heavily recommend it.