Negotiation Tactics and Counter-Tactics, Part II, Maneuvers
Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant
Editor’s Note: This is Part 2 in a 5 part series on negotiation tactics and counter-tactics. Part I deals with an overview of negotiation tactics. Part 2 explains the first category of Maneuvers. Part 3 deals with Flyers, Part 4 with Gambits, and Part 5 with Ruses.
The Maneuvers include
- Higher Authority
- Split the Difference
- Trading Concessions
- No Statement
Higher Authority is the familiar tactic of the car salesman. It is the buyer’s duty to establish the authority of the seller in advance of any meaningful talks. Yet, it happens that the seller extracts our best offer and then claim that she must check with the manager and get back to us. What should we do in the jaws of this trap? Immediately suspend the talks by saying, “Oh, I did not realize that you did not have the authority to make this deal. Everything is off the table now because we might be guilty of bargaining in bad faith and we don’t want to do that. I tell you what. Get your boss down here today and we’ll try to wrap this up. Otherwise, we may have to make entirely alternate plans.” If the seller’s tactic was an honest mistake, she stands aware of the problem. . If not, the tactic has been exposed and a warning issued for future dealings. The best route is to avoid the trap by qualifying the authority in advance.
Who has not used the Split the Difference? It seems honest and innocent enough and often it is. It has powerful impact in the hands of the artful because they know that only one out of 100 possible splits are 50/50. You never want to be the first to offer to split the difference. It transfers veto power to the other side and may worsen your position. This is another of those actions that confuses the other side, much like a seller conceding price reductions in successive increasing amounts. Instead, get the other guy to offer to split the difference. Here is one painful example. I once had a customer who bemoaned the fact that we were so close, and how he hated to see the deal fall apart. He walked me down the aisle, extolling the virtue of our work together and how badly he felt about not being able to accept what he knew to be a fair offer, but the budget was under funded… In a misguided gesture of conciliation and without getting conditional agreement first, I offered to split the difference. The next day, he told me that he had considered my offer, but still could not go along, but we were so close… I offered to split it again, to which he reluctantly agreed. Doing the math, he gave 25% and I gave 75% in this ‘split’.
The Concession Trade Off is a very seductive maneuver. It seems entirely justified that one good turn deserves another. The stumbling block here is “perceived value”. You need not reciprocate with a concession for every one you earn because you do not know the actual value to the other side. Gift certificates provide an excellent example. Merchants love to sell these because they are priced at retail, bring customers back, and have a low rate of redemption. As part of a settlement negotiation with an unhappy customer, gift certificates are a common concession. The customer may never use it, but it satisfies the demand that the “You owe me” debt be paid off. Thus they concede a high perceived value item at a low actual cost. Many skilled negotiators build in concessions of little actual value into their negotiation plan. This is a good idea as is the related concept of planning to lose on some battles.
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The No statement is a big tactic with a little name and it packs all the potency of Napoleon. Powerful in itself, its seeds spread over a field of equally effective tactics. Faced with “No” for an answer, we can ignore it, react angrily, accept it without challenge, ask for more information, or some combination of the above. All have merit for different reasons, making this tactic one of the most common in negotiation. Sales pros tend simply ignore the ‘No’ statement. They learn early on, or understand intuitively, that no means maybe. In some cases, it seems that they have grown a membrane in their inner ear so that every time the word ‘No’ forms on the buyer’s lips, it is immediately interpreted as ‘Maybe’. Everyone involved in negotiations would do well to emulate such wisdom. ‘No’ is nothing more than an opening position.
As a counter the ‘No’ statement, apply technique of neither agreeing nor disagreeing. We are interested in learning more about what motivates the ‘No’ position. Now is a perfect time to promote elaboration by invoking the “Tell me about it” technique. The announcement was intended to claim certain inviolable territory, but the assertion may be in earnest of a form of posturing. In either event, we want to determine what motivates the statement. Suppose your counterpart states, “We can negotiate anything but delivery in less than 6 weeks”. Doesn’t this strike you as curious? An immediate reaction is to discover exactly what this time limitation means and why it is put into play on the first pitch. It could indicate that orders are backed up for production but advancement to the head of the line could be arranged if we pay for the additional freight and a convenience fee to bump down some other orders already in place. It could also mean that the advance time cannot be compressed by any method whatsoever. Perhaps it is even a High Initial Demand designed to flush out our reaction and thereby gauge our must have position. Any response but the flat invitation to expound on the position by telling us more about it falls into one or more traps.
Non negotiable positions are one of the seeds of the ‘No’ statement that grow to take on a significance of their own. An aggressive proclamation of boundary limits warns everyone that the very mention of certain topics will not be tolerated. Is this a bullying tactic? Maybe, or it could be borne a feeling of inadequacy. This person is fearful and probably doubts his ability to handle the negotiation in a more subtle manner. This is our signal to approach this person in the personality style they find most suitable. Doing so lowers the communication barriers for your counterpart and helps them to express themselves after overcoming the initial terror.
Here is one example of how the result is better for both parties when an earnest application of the non-negotiable position is clarified by learning the underlying motivation. The seller says that the price is fixed and not up for discussion. Well, that ‘No’ statement bounces off our ears and excites our ‘maybe’ bone. Why is the price fixed? If the quality, service or delivery parameters changed, wouldn’t the price change to reflect the shuffled cost constituents? Of course they would, in any logical set of circumstances. If the seller is envisioning a one shot deal and you have more extensive quantities in mind, the price won’t be fixed for very long into the discussion.
Another related tactic is to introduce a host of non-negotiable demands, many of the straw or red herring variety. The purpose of this ‘No’ statement overload is to withdraw these later in exchange for the elimination or reduction of more legitimate demands of the other side. This is often an effective tactic. To counter it, keep a supply of your own non-negotiables ready to insert in the talks. Your efforts at being reasonable by keeping your non-negotiables off the table may not work in the face of unreasonable demands from the other side. Expect this tactic more often in Win-Lose strategies.