We have all had to negotiate something in our lives. From relationship problems to purchases, job negotiations and negotiations with family, we negotiate every day. The art of negotiating seems to be lost in the western world. A common pitfall is to look at negotiating as negative and simply arguing, where the answer is always somewhere in the middle (more on this later – hello foreshadowing).
Learning how to negotiate will give you more confidence in big and small situations alike. It will even help you with Shit Tests.
I’d like to discuss the importance of good negotiation and how you can improve every aspect of your life using a few of these principals. These are skills that are required to succeed in life. Just keep in mind that all of this takes practice, start small and work on building your skill.
First a quick story.
A few months ago I interviewed for and was offered a promotion at the company I work for. This position has much more responsibility than the current position I had. Upon accepting the position is where the negotiations began. I had 2 pieces that were important to me, overall compensation and the job title. One monetary, one non-monetary.
When I was contacted by Human-Resources with the official job offer they were already offering me about 90% of what I wanted. They were offering me the job title I desired – Check, however, the salary was lower than where I wanted it to be. Since this new job is with the company I work for, and I knew the person who would ultimately have to approve any requests I made, I knew the tactic to take. Instead of requesting a higher base salary, I countered with a higher annual performance bonus than they were initially offering. This higher bonus could have an upswing of 10-30k a year. Not bad. They accepted my counter offer and I agreed to take the position.
I’ll discuss later in the article what I did right and wrong in this negotiation. First, I’ll talk about how to negotiate.
Tips for Successful Negotiation
Whenever possible be over-prepared when entering a negotiation. Are you looking at buying a new car? Look at the factory invoice – the price that the dealer purchased the car from the factory. Look at any incentives the car manufacturer is providing to the dealer. How long are the cars staying on the lot before being sold? All of this information can assist you before you even begin negotiations.
Try to gather everything you could possibly need, talk to people, look online, become an information sponge.
Unless you are negotiating the release of your kidnapped child, you most likely have other options. Even so, maybe that’s your least favorite child, and you have others.… But I digress. Even when negotiating with your employer, you have the ability to walk and find another job. I always say you are being paid exactly what you deserve.
Always act as though you have other options. If you are negotiating a higher salary with your current employer, how much easier would your negotiation be from your perspective if you had another job offer with the salary you are asking for? If you can’t actually create multiple options, act as you have them.
Fake it until you make it on this one.
Middle ground fallacy
When learning how to negotiate and trying to come to a common ground there is a common misconception that the truth lies somewhere in the middle. I want to buy your car for $10,000 but you are asking $20,000. So does this mean $15,000 is acceptable? Or here is another example. Say we took a seat across the table with Mao Zedong. Our position is that he does not kill any Chinese citizens, his position (as history has shown) is that he kill over 45 million people. So a good compromise might be what, that he murders only 20 million people?
Sometimes there is no middle ground. If you only have $10,000 to spend on a car, higher isn’t a compromise, it is unfeasible. This is not to say you can’t start lower and work up to your actual price. But compromise isn’t always the best policy.
If you want to know the biggest secret in a successful negotiation, it’s listening. People enjoy being heard and knowing that what they are saying is being taken in. In a negotiation, active listening techniques build trust and help to break down some of the barriers inherent to being adversaries. Make sure you restate their concepts and important points they make in your own words. Doing this accomplishes two main goals. First it makes sure you actually understand them and you aren’t confusing their statements. And second, it makes the other person feel as if you truly listening to them.
If you’d like to geek out on active listening, here is a great resource.
Mirroring is something you do without even thinking about it. Picture a group of friends talking, standing around in a circle. One of the friends takes a seat at a nearby chair. What do the other members of the group usually do? Exactly, most of them also sit down. Why is this? I bet you have done this without thinking about it. We unconsciously mirror people’s behavior when we are trying to gain their favor or have established friendships.
Another aspect of mirroring is using your opponent’s words/actions back at them. You can do this by slowing your voice down and start your sentence with “I’m Sorry” then mirror back what they said, followed by at least four seconds of silence.
Car salesman: The best price I can offer is $14,995.
Savvy Negotiator: (slows down speech) I’m sorry, your best offer is $14,995?
Savvy Negotiator: (waits at least 4 seconds)
This is indeed a very simple example, but you get the point on how mirroring works.
Label their emotions
Yet another very potent tool is to label your opponent’s emotions. If someone is overly emotional in their negotiation, it may have nothing, or everything to do with you. When you are labeling their emotions you don’t want to accuse them of anything. Instead use language like, “It seems like…” or “It sounds like…”
These types of clarifications can help coax more information out of your adversary, and when done right, paint you as an empathetic listener. One thing is to let the statement sink in. Don’t quickly rush to speak and defend or offer excuses for them. Give them time to process and respond to what you said.
7-38-55 Percent rule
You have undoubtedly heard of this rule, but possibly by a different name. These are the percentages in which your communication is processed. Understanding this rule will help you learn how to negotiate.
7% The actual words
38% The tone of voice
55% Body language and Facial Expressions
You have probably all experienced this while texting. Just using the words can get us in a lot of trouble, which is why emojis are so popular. You can convey a little more over the phone, but still less than halfway there. And you’d be surprised how much you can understand of a situation by just watching body language/facial expressions. I challenge you to watch a couple of minutes of a TV show on mute. I bet you’ll understand a fair amount of what’s happening.
All this to say that whenever possible try to negotiate in person, second, on the phone, and never try it via written communication.
Identify game changers
Also knows as “black swans,” these are pieces of information that, if known, would completely change the negotiations. For example, if you were purchasing a used motorcycle how important would it be to know that the person is leaving the country the next day? What if you also knew you were the only person who showed any interest in the motorcycle? Those completely change your tactics.
Always be on the lookout for these opportunities. In the back of your mind always ask “Why are they communicating what they are communicating right now.”
Don’t Accept a “Bad Deal”
You can always walk away. This is critical. You can always walk away and try again another day, or with someone else. A bad deal for you is usually a great deal for the other guy.
To win a negotiation you have to show you’re willing to walk away. And the best way to show you’re willing to walk away is to walk away.Michael Weston
For further reading on how to negotiate, check out Never Split the Difference, by Chris Voss.