By Steve Adubato, PhD
My colleague, Mary, recently negotiated a terrific deal on a new mini-van. As we discussed the negotiation, it became clear that the way she communicated set the wheels in motion for a potential deal. The key to success was Mary’s attitude going in and potentially going out of the negotiation process. Her mini-van experience is something we can all learn from when it comes to negotiating, which we do all the time, sometimes without even realizing it.
Q: How do you put yourself in the best position to negotiate?
A: Once you have established exactly what you are looking for, you must be prepared to walk away and say “no deal” confidently. That’s exactly what Mary said when I asked her why she felt she got the deal she was looking for; “I went with an exact number I wanted to pay, and refused to budge on that number.” Mary let the salesman know she would love to buy a mini-van from him, but if that were not possible, she was “going to buy a mini-fan from someone else today.”
Q: But isn’t there a big risk in establishing a bottom line number in a negotiation?
A: It depends. Assuming the number is realistic and in the ballpark by industry standards, it’s essential that you establish it. Mary was prepared to literally walk away if she couldn’t negotiate that number. The key, however, is to be totally committed when you say; “Sorry, I wish I could reach your number and I understand where you are coming from, but the most I can pay is XYZ.” At that point, you must get up, be polite and graciously walk away.
Q: What are the risks with bluffing in this type of situation?
A: If you are caught bluffing or the other party has a sense you are bluffing and calls your bluff, you’re in trouble. It’s one thing to communicate a good game in negotiating, but it is more important that your heart and head are in sync. Simply put, you can’t want something too much, be it a car, salary or a house. If you want it too much, and are too emotionally attached to getting it, you are at a big disadvantage. When the other party knows that it will be virtually impossible for you to walk away, there is a tendency to squeeze hard.
Q: How important is it to prepare before going into a negotiation?
A: Interesting question. Sometimes the “smartest” people wind up saying too much in a negotiation because they think they have all the answers. Sometimes, playing it just a little bit dumb can be a big advantage. “I’m sure you can get what you say you can. Unfortunately, my (boss, spouse, board, etc.) won’t allow me to go beyond XYZ. What do you think we should do?” If necessary, pass off the authority and/or responsibility for a negotiation on someone else. Sometimes it’s okay to simply be the messenger without all the answers. The key is to have the other party feel their options are limited and their best bet is to make a deal with you as opposed to walking away with nothing.
Q: But what if the other person has all the power in a negotiation?
A: Power is something that is “perceived” as opposed to being an “objective reality.” Just by perceiving that you have power, you automatically have it. Beyond confidence and a willingness to walk away, identifying alternatives also gives you power. It’s when you don’t think you have any alternatives that you are powerless regardless of the actual circumstances of the negotiation.
Write to me regarding a recent negotiation you were involved in. What did you learn from it?