Power Negotiating Tips Article by: Roger Dawson
PLAY RELUCTANT BUYER
When you are buying, you can squeeze the seller’s negotiating range with this three-stage tactic. Stage One: Listen very carefully to their proposal and ask all the questions you can think of. Stage Two: Tell them that you appreciate all the time that they have taken with you, but tell them it’s not exactly what you’re looking for. Stage Three: At the last moment, call them back and say, “Just to be fair to you, what is the very lowest price you would take?”
Danger Point: A seller may be playing Reluctant Seller with you.
Solution: Believe that you have more power than you do. Let them know that you have options. This gives you power.
ALL POWER IS SUBJECTIVE
You have power if you think you have power, even if you don’t. You don’t have power if you don’t think you have power, even if you do. Reality doesn’t matter in a negotiation. Perceptions matter because perceptions become reality. The Japanese surrendered in 1945 because they thought we had an arsenal of atomic bombs with which we could destroy their country. We didn’t. We didn’t have any more atomic bombs. We had made only two and had just used both of them. But they thought that we had more, and that perception became reality.
Danger Point: You feel that you have no power in the negotiation because the other side appears to have options and you don’t.
Solution: Find out whether their options are real. Or have they just convinced you that they have options when they don’t. Then work to convince them that you have options. The perception of options gives you power.
DEVELOP YOUR REVERENT POWER
Reverent Power refers to your ability to project that you have a consistent set of values and beliefs. Ronald Reagan had it. Bill Clinton did not. Acting consistently makes people trust you.
Danger Point: Other people can use this on you. When they say to you, “But this is our standard contract that all of our vendors sign,” or “We’ve never made an exception to this in the 27 years that we’ve been in business,” realize that they are just using Reverent Power on you. It’s hard to oppose because we admire people who do things in a consistent way.
Solution: Research to find out if they have ever made exceptions to the rule and let them know that you know about it. If you can’t find any exceptions, you must convince them that it’s time to change the rule.
GAIN POWER BY IGNORING REWARD AND PUNISHMENT
If you feel that the other side can reward you by accepting your proposal or punish you by turning you down, you have given them the power to intimidate you. Turn that around by projecting that you have options. Tell them you are very cautious in selecting your business partners and they are fortunate that you are willing to do business with them.
Danger Point: They may call your bluff when you tell them that you have options.
Solution: Work to develop your options before you start the negotiation. It’s the most important thing you can do.
DECLINING VALUE OF A SERVICE
The value of a material thing can go up because of scarcity or inflation. However, the value of a service always appears to go down rapidly.
Danger Point: You make a concession in the negotiation in the hope that the other side will make a reciprocal concession. Time passes and the value of your concession goes down immediately.
Solution: If you make a concession, get a reciprocal concession immediately, before its value evaporates. Better still, make your concession conditional upon their concession.
HANDLE IMPASSES WITH THE SET-ASIDE GAMBIT
If you are a long way apart on an issue, set that issue aside and create momentum by reaching agreement on smaller issues.
Danger Point: Before the negotiation starts, they tell you that they already have two good proposals from other people. And unless you can beat those proposals, there is no point in talking.
Solution: Tell them there are many things to resolve before you can discuss price. Create momentum by resolving smaller issues first.