Negotiation techniques

- Over the years, I've learned some great negotiating techniques and tactics, and I'd like to share them now. The first is called The Invisible Man, and that's where you're in the heat of a deal and you don't want to give an answer right now, or you don't like the position that the other party is taking, and you just say, well, I have to check with my colleagues before I can give you an answer. That other party isn't in the room, so you've pushed back the negotiation, you've bought yourself some time, and now you have the ability to go back to the other party, and say, I know you wanted a 20% discount, but I've spoken with my colleagues and the best we can do is 10%. So, you've created an invisible authority that the other party has to negotiate against. The second technique is called The Bogey. Act like something you don't care about at all is really important to you. And then as you go through the deal, fight hard for that one point, but then you can trade it away later like you're making a major concession and it doesn't really cost you anything. The next technique is called The Nibble, and this is right at the last minute, right before you get a deal done, ask for something extra. It's not going to be big enough to break the deal, but beware, it can upset the other party. For example, if you're out shopping for a suit, and you buy two suits and you're spending a lot of money, and at the last minute, right at the register, say, well, you know what, I'll buy the suits, can you throw in a tie and a belt? Now, the salesperson is looking at a really big commission and they're not going to lose that big commission over a tie and a belt, and it's a small nibble right at the end. The next technique is The Highball or Lowball, depending on the position. Start ridiculously high, or ridiculously low, to cause the other party to really reevaluate their opening price. Now, there's risk in this one, it could backfire and end the deal immediately. Another technique is Future Value. This is where you promise more value tomorrow in exchange for concessions today. Hey, we want to do this deal with you, so we want a much lower price, but we're going to create a long-term, strategic partnership with you. And in the future, we're going to send a lot of business your way. Here's the thing, that business never materializes. Early in my career, I would accept that, and I would make concessions on the promise of that future business. And so many times, I've been disappointed when it doesn't appear. If you're promised future value, beware of this dynamic. And the best way to make that happen is build it into the contract and say, fine, I'll give you the concessions, when that future business comes in, and protect yourself from that future value approach. The last technique is Multiple Rounds. Every time you think you have a deal done, there's one more negotiator they didn't tell you about and you have to satisfy their needs, and at each step of the way, that one additional negotiator wants a little bit more of a concession. I've been in several situations where we thought we had a deal done and we got the, oh, well, we have to kick it up to my boss, and that boss wanted another 5% or 2%. And after several rounds of negotiations, we gave up a lot of value. Now, you can use all of these techniques as you go through your negotiations. They can be very effective, each one has their downsides. So, be deliberate around picking the technique and understanding the risks that come along with it.