It’s been said that negotiating is an art. I like to think of it more like a contact sport because you can’t win at art. I like to win!
I truly enjoy negotiating so that both parties win (the ever popular win-win scenario) except I prefer having the larger win on my side. I had to learn my negotiation tactics on the job as a purchasing manager. I found that my sense of fair play and drive to win made for very successful and repeatable negotiations. I never wanted to beat up anyone with whom I’d like to continue doing business.
Now, you may be thinking that negotiations are just for buyers and sellers but that would be just part of the story. You could probably think of several times when you have walked into a cross-functional meeting where different groups want to do something their way and you want to do it your way. Everyone shows up to fight it out and you may or may not reach consensus. This is a wonderful place to negotiate!
Below, I’ve included several of my favorite and most effective negotiating tactics. I don’t necessarily want to include everything as you never know if I’ll ever have to negotiate with you someday (he says with a wink).
Do your research before anything else
Find out as much as you can before you begin negotiating. Research the company, the industry, or the other person’s background and priorities. You’ll want to know everything from the other person’s perspective. What is important to them? What will they rely upon during the negotiations? Let’s imagine that all of the pertinent details about a company are in the shape of a thirty foot tall iceberg (stay with me here). During the negotiations, you’ll want to easily be able to talk about the top three feet that are above the water. Later on, you can reveal what you’ve learned about the level five feet under the water. If you later make reference to what you know that is fifteen feet below the surface, the other side may become convinced that you might just understand all thirty feet. You don’t necessarily have to know that much, but it can help set the leverage in your favor.
Know what you want before you start
If you don’t know where you want to go before you start, how will you know when you get there? Outline what you must have, what you want, and what you’re willing to give up. To help explain how they’ll be used, let’s use a Tootsie Pop® as metaphor. Think of your must-haves as the Tootsie Roll®, your want-to-haves as the candy shell, and your willing-to-give-ups as the wrapper. Put your three lists in writing so you don’t have to memorize them but be sure not to show this to the other side.
The must-have items are those which are absolutely vital to your requirements. This list should be concise enough to recognize that missing any one thing should make you walk away from the negotiations.
The want-to-have list is still very important to you but you’ll be OK if you don’t get all of them. Don’t shortchange this list during your preparation. You can’t hope that during the heat of the negotiations, want-to-have items will pop into your mind. Remember that it is rare that the other side will give you things you didn’t ask for. One of my favorite credos is “Politely ask for what you want, you never know when you’ll get it.”
The last category of willing-to-give-up items is made up of two sides: things that you are willing to do for the other side and those that you’re willing to let the other side not do for you. Be sure to think of any many as possible as volume counts when you’re giving away.
Negotiate for the whole Tootsie Pop®
During your negotiations, you’ll want to tell the other side that there are certain things that you must have. Then ask for the entire Tootsie Pop®, wrapper and all. If they agree to all of your demands, then nothing more need be said. But, as the other side looks for concessions, you will have your wrapper items ready. Only offer your wrapper items one at a time as you’ll want to make a big deal over how many things you’re giving up. The number of items can matter more than their actual value if you sell it right. This is why you’ll want to collect as many as possible during your preparation. Remember that you must have the Tootsie Roll® and would also like to have the candy shell. You really never needed a wrapper. Only once you’re done with your wrapper items you should start on your candy shell items. Be very judicious in giving these away as you’d really like to get all of them. If you are not going to get any of your candy shell items, you need to realize that you’ve been making many concessions to get to this point. The other side may be gaining momentum during the negotiations. You need to remain aware since your next step is the Tootsie Roll® that you must have. You can only take one more “no” before you must walk away. Don’t get carried away by the momentum to keep going after that “no”.
Use props and cartoons to help make your point
Many times, your negotiations are over difficult-to-visualize ideas, plans, or money. It’s easy to get confused comparing money against time or convenience. Once, when I was buying packaging, my initial plan called for a price of five cents per unit. After some changes to our requirements, the supplier came back to tell me the new price was was going to be seven cents. This increase, over the hundreds of thousands I would need, would ruin my projected savings. As I went to the supplier’s office and met with their senior leadership, I told them I really needed their help to get back to the savings goals that had already been expected at my company. I reached into my pocket and put a nickel on the table. I asked them to let me buy their product for that nickel. That small prop garnered many chuckles but it became the focal point of our discussion. Over the afternoon, we worked through many options and I walked away with a price of 5.9 cents each. That nickel provided just the focus that I needed.
Even if you’re not in the business of negotiating externally for price, you’ve probably wanted to convince others of plans you’d like to see accomplished. Instead of showing up to the meeting with the other groups ready to just talk out everything you’d like, show up with a cartoon. As silly as it sounds, my experience has been that whoever shows up first with a cartoon, wins. The cartoon serves to simply explain what your plan is all about so that others can see and hear what you mean. Just as importantly, it becomes the default plan when no one else shows up with a supporting document. Taking ten minutes to throw some stick figure doodles on a 8½ x 11 piece of paper may just make your plan THE plan.
Talk about the future as if it were fact
Allow the other side to visualize your future state with you. Don’t leave room for a hypothetical state that doesn’t include what you want. Try something like this: “I’m looking forward to a long running and mutually beneficial partnership with you. This will all be possible since we’ve executed this contract where you’ll sell me your product at the price I want. Won’t it be great knowing that your company has steady business and our two companies can grow together without having to constantly re-negotiate? This will be such a load off of my plate and yours as well.” The more often you paint this picture, the more real it will become in your eyes and theirs. It isn’t a strong arm technique but it does subtly shift their reality.
Tell them what you want, don't ask
When you’d like someone to do something for you that is a bit out of the ordinary, don’t bother to ask if they would be willing to. Simply tell them what you’d like to have happen and confirm with them that it won’t be a problem. Be sure to thank them for their flexibility and let them know how much it means to your relationship. If the answers to any request could be Maybe, Yes, or No, too often we ask for their Maybe but expect No. Simply thank them for their Yes in advance. Most people are willing and happy to meet your needs just for the asking.
Be mindful during your negotiations progress
These next two bits of advice are terribly simple but many get lost during the heat of the negotiation. First, when things are going your way, shut up. If the other side is giving you what you want, let them. You don’t have to speak just for the sake of hearing yourself. Second, once you get what you want, stop. Since you already know what you’re out to achieve, have the discipline to stop once you get there. I’ve seen goodwill ruined once the goals had been met but one side continued to push just because they “didn’t want to leave money on the table.” If there is any remaining room to negotiate, save it for next time and point out what you didn’t do during the first go ‘round.
Sometimes, you should just make like the owl and eat the whole Tootsie Pop®
During a negotiation training exercise, I was positioned against a seasoned buyer with one five dollar bill and five ones between us. We were to divide up the ten dollars between us in two minutes and it couldn’t be a fifty-fifty split. As the instructor told us to begin, I reached down and grabbed all of the money and put it in my pocket. “What would you like to talk about?”, I asked. His jaw dropped. There is nothing like holding all of the power in the negotiation. Once the Owl had counted to “a-three”, he had eaten the whole Tootsie Pop®. He got what he wanted and the kid was left holding the stick.
Click here to see the classic Tootsie Pop® advertisement