Post on 22-May-2020
THE PSYCHOLOGY OF NEGOTIATION Nick Kolenda
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BeforetheNegotiation 5.....................................................
Strategy:IncreaseYourPower 5..............................................................Tactic1:GatherBenchmarkData 5......................................................................................Tactic2:EnhanceYourBATNAs 6..........................................................................................
Strategy:ControltheLogistics 7...............................................................Tactic3:ChooseaDayWithNiceWeather 7....................................................................Tactic4:ChooseanEarlyTime 8...........................................................................................Tactic5:ChoosetheRightMedium 9...................................................................................Tactic6:NegotiateatYourOfLice 11.......................................................................................
Strategy:EncourageCooperativeBehavior 11.......................................Tactic7:AvoidNegotiationTerminology 12.......................................................................Tactic8:ScheduleaFutureInteraction 13...........................................................................
StartingtheNegotiation 14..................................................
Strategy:BuildSomeRapport 14...............................................................Tactic9:StartWithSchmoozing 14.........................................................................................Tactic10:DisclosePersonalInformation 15.......................................................................
Strategy:BringThemPastriesandCoffee 15.........................................Tactic11:MimicTheirNonverbalBehavior 15..................................................................Tactic12:ProvideanUnsolicitedFavor 16..........................................................................Tactic13:IncreaseTheirGlucoseLevels 17........................................................................Tactic14:GeneratePhysicalWarmth 17..............................................................................
DuringtheNegotiation 19.....................................................
Strategy:ConveytheProperEmotions 19...............................................Tactic15:ShowSignsofDisappointment 19......................................................................Tactic16:BecomeAngry(WhenAppropriate) 20............................................................
Strategy:DemonstrateYourPower 21.....................................................Tactic17:MentionYourBATNAs 21.......................................................................................Tactic18:AvoidDisclaimersandWeakLanguage 22......................................................
Strategy:ProperlyAddresstheTerms 22................................................Tactic19:AddressAllRelevantTerms 23.............................................................................Tactic20:RankOrdertheTerms 24........................................................................................
EndingtheNegotiation 25....................................................
Strategy:AnchorYourOffer 25...................................................................Tactic21:MaketheFirstOffer 25............................................................................................Tactic22:RequestaHighPreciseRange 26........................................................................
Strategy:FrameYourOffer 27.....................................................................Tactic23:SeparateGains/CombineLosses 28.................................................................Tactic24:CreateaVisualBalance 29.....................................................................................Tactic25:JustifywithGraphs 30..............................................................................................
Strategy:CounterTheirOffer 31................................................................Tactic26:AskDiagnosticQuestions 31.................................................................................Tactic27:AlwaysCounterTheirFirstOffer 32..................................................................Tactic28:PauseAfterTheyMakeanOffer 33....................................................................
AftertheNegotiation 34........................................................
Strategy:FinalizetheDeal 34......................................................................Tactic29:FollowUpWithanEmailSummary 34.............................................................Tactic30:ComplimentTheirNegotiationSkills 34..........................................................Tactic31:BetheFirsttoDrafttheContract 35..................................................................
Conclusion 37............................................................................
Before the Negotiation Itdoesn’tmatterifyou’rebuyingacar,interviewingforajob,orrequestingaraise.Yourworkstartsbeforetheactualnegotiation.
Thissectionexplainsthoseinitialsteps.You’lllearnclevertacticsthatwillhelpyousecureabetterdealinthefuturenegotiation.
STRATEGY:INCREASEYOURPOWER
Poweriscrucial.Whenyouhavepower,yourcounterpartwillgivelarger(andmorefrequent)concessions(Kim,Pinkley,&Fragale,2005).Innegotiations,themostpowerfulpartyusuallywalksawaywiththebestdeal.
Butthatsparksanimportantquestion:whatifyouhavelesspower?Whatifyou’renegotiatingwithyourboss?
Evenifyourcounterparthashigherauthoritativepower,youstillhavehope.Thissectionwillteachyouafewnegotiationtacticstobalancetheodds,evenwhenyourcounterparthashigherpower.
Tac$c1:GatherBenchmarkDataMostofthetacticsinthisarticlearegroundedininteresting—andoftensurprising—academicresearch.Thistactic,however,isgroundedincommonsense.
Togainleverage,youneedknowledge.Youneedtounderstandthetypeofdealthatyoushouldbereceiving.
Ifyou’reinterviewingforajob,researchaveragesalariesforsimilarpositions.Youcouldgatherthosebenchmarksthrough:
• SalaryWebsites.VisitfreeresourceslikePayScaleorGlassdoor.• LinkedIn.Contactpeopleinsimilarroles.• Recruiters.Askemploymentagenciesforcomparablesalaries.
Withoutthatknowledge,you’llbenegotiatingblindly.You’llbeatthemercyofyourcounterparts,allowingthemtodictatethesizeofyourdeal.Don’tletthathappen.
Tac$c2:EnhanceYourBATNAsPoweremergesfromtwomainfactors:
1. Value:WhichpartybeneLitsmorefromasuccessfulagreement?2. Alternatives:Howmanyalternativesexistforeachparty?
Youcanincreaseyourpowerbyalteringthosetwofactors.
YoucouldaltertheLirstfactorbyofferingmorevalue.Whenyouoffermorevalue,yourcounterpartbecomesmoredependentonasuccessfulagreement(givingyoumorepower).
Unfortunately,thatoptionissomewhatimpractical.Luckily,thesecondfactorismoreuseful.FisherandUry(1981)describedthatsecondtacticbycoiningthetermBATNA:
BestAlternativetoaNegotiatedAgreement(BATNA)–Similaralternativedealsyoucouldpursueifyoudon’treachasuccessfulagreement.
Ifyoudon’thavestrongalternatives,youbecomedependentonyourcounterpart.You’reattheirmercy.Sinceyouhavelessleverage,you’llneedtomakelargerconcessions.That’snotagoodposition.
Insteadofputtingyoureggsinonebasket,youshouldenhanceyourBATNAsbeforeanynegotiation.Ideally,youshouldenhancethe(a)quantity,(b)quality,and(c)plausibilityofyourBATNAs(Kim,Pinkley,&Fragale,2005).
Ifyou’reapplyingforajob,applyandinterviewwithmultiplecompanies(Kim&Fragale,2005).ThoseBATNAswillreduceyourrelianceonanyindividualcompany.
STRATEGY:CONTROLTHELOGISTICS
Whenplanningthenegotiation,you’llneedtocoordinatewhen,where,andhowitwilloccur.Negotiatorswithlesspowerareusuallyaccommodatingwiththosedecisions:
Counterpart:Whenareyoufree? LessPowerfulNegotiator:I’mfreeanyafternoonnextweek.Letmeknowwhichdayworksbestforyou.
Thatapproachisharmful.Whencoordinatinglogistics,don’tbeoverlyaccommodating(andneverrevealanemptycalendar).Ideally,youshoulddictatethoselogistics.
Counterpart:Whenareyoufree? PowerfulNegotiator:I’mfreeat10amnextWednesday.Doesthatworkforyou?
Evenifyourcounterpartneedstosuggestadifferenttime,yourassertivenesswillincreaseyourperceivedpower,givingyouamorefavorabledealinthenegotiation(Diekmann,Tenbrunsel,&Galinsky,2003).
ThatheightenedcontrolalsogivesyouanotherbeneLit:you’llbeabletochooselogisticsthataremorefavorable.Howso?Thenextthreetacticsexplainwhichlogisticswillgiveyouanupperhand.
Tac$c3:ChooseaDayWithNiceWeatherWeatherhasapowerful—oftensubconscious—effectonourbehavior.It’sprettyscary.Whentheweatherisbad,reportsofdomesticviolenceincrease(Cohn,1993).
Despitethenegativeeffectsofbadweather,theoppositeoccursforgoodweather.Whentheweatherisnice,you’remorelikelytohelppeople,suchasleavinglargertipsforwaitresses(Cunningham,1979).
Whentheweatherisnice,peoplefeelhappier.Inturn,theydevelopbehaviorsthatareconducivefornegotiation,suchas:
• Cooperation(Forgas,1999)• Creativeproblemsolving(Carnevale&Isen,1986)• Tendencytoconcede(Baron,1990)
Ifyouneedtonegotiateinbadweather,youshoulddiscussthebadweatherbeforethenegotiation.Inonestudy,peopleshowedlesssatisfactionwiththeirlifewhentheweatherwasbad(Schwartz&Clore,1983).
However,thatnegativeeffectwaseliminatedwhenresearchersbegantheconversationbytalkingabouttheweather.Thankstothatdiscussion,peopleattributedtheirdampenedmoodtotheweather(andtheyadjustedtheirmoodstocompensate).
Tac$c4:ChooseanEarlyTimeWhenproposingatime,youshouldusuallysuggestanearlytime(perhaps9-10am).You’llgettwomainbeneLits.
First,anearlytimeensuresthatyou’llhaveampletimetonegotiate.AsMalhotraandBazerman(2008)explain…
“The more time and other resources a negotiator has invested in the negotiation, the more willing the negotiator will be to accept the agreement offered.” (pg. 17)
Youcanthankcognitivedissonanceforthatoutcome(Festinger&Carlsmith,1959).Ifyouwantadeeperunderstandingbehindthatphenomenon,youcanrefertoPart2ofmybook,MethodsofPersuasion.
Butthat’snottheonlyreasonforchoosinganearlytime.Ifyourcounterpartisnegotiatingwithotherpeoplethatsameday(e.g.,acompanythatinterviewsmultipleapplicants),anearlytimehelpsyougenerateastrongerimpression.
PeopleareeasilyinLluencedbyprimacyeffects.Wheninformationispresentedearlierinasequence,itgeneratesastrongerimpactonlong-termmemory(Murdock,1962).
Ifyou’recompetingwithmultipleapplicants,youshouldstrivetobetheLirstintervieweeinthatsequence.Thatpositionwillmakeyourinterviewmorememorable.
Whenhiringmanagerseventuallychoosethebestcandidate,yourinterviewwillentertheirmindmoreeasily.ThankstoconceptualCluency,thateaseofrecallwillbemisattributedtoyourperformance.Becausethey’llrememberyoumoreeasily,they’llfalselyinferthatyou’reabetterLitfortheposition(Whittlesea,1993).
Ifyoucan’tchooseanearlytime,youshouldchoosealatertime(perhaps4-5pm).Ifyoucan’tbetheLirstinterviewoftheday,youshouldstrivetobetheLinalinterview(whichwilltriggerarecencyeffect).
Tac$c5:ChoosetheRightMediumAnotherconsiderationisthemedium.Shouldyounegotiateface-to-faceorviaemail?Untilrecently,theresearchwascontradictory.
Ononehand,face-to-facecommunicationgeneratesmorerapport(Drolet&Morris,1999).Italsoconveysmoreclaritysinceinformationisoftenconveyednonverbally(DePaulo&Friedman1998).Somestudiesevenfounddirectevidencethatface-to-facenegotiationsproducebetteroutcomesthanemailnegotiations(Valleyetal.1998).
Butdon’tgettoohopeful.Somestudiesfoundoppositeresults,whereemailnegotiationsproducedbetteroutcomes(Croson,1999).Someresearchersattributethoseresultstothe“exitability”ofemail.Sincenegotiatorscanleaveanemailthreadmoreeasily,theconditionsaremoreunstable.Thus,partiesaremoremotivatedtoreachanagreement(Hatta,Ohbuchi,&Fukuno2007).
Sowhat’stheanswer?Whichmediumisbetter?Surprisingly,itdependsonyourgender(Swab&Swab,2008).
• Femalenegotiatorsreceivebetterdealswhentheycommunicateface-to-face.• Malenegotiatorsreceivebetterdealswhentheycommunicateviaemail.
Whydoesgendermatter?Whenwecommunicateface-to-face,wefeelmoretensionandarousal,thusresortingtoourinstinctivegenderroles:
• Femalesresorttocaringandcommunicativebehaviors• Malesresorttoaggressiveanddominantbehaviors
Ifyou’renegotiatingwithamale,youshouldreducenonverbalcues(e.g.,negotiateviaemailorphone).Ifyouneedtonegotiateinperson,reducethelevelofeyecontact(Swab&Swab,2008).
Ifyou’renegotiatingwithafemale,youshouldincreasenonverbalcues(e.g.,negotiateinperson).Eyecontactisparticularlyeffective.
Theremainderofthearticlewillassumeface-to-facenegotiations,butthetacticswillworkforanytypeofcommunication.
Tac$c6:Nego$ateatYourOfficeIfyounegotiateinperson,whereshouldyoumeet:theirofLice,yourofLice,oraneutrallocation?
Someresearcherswouldargueaneutrallocation.Byremainingunbiased,youcultivateasharedfocusonproblemsolving(ratherthancompetition).
Ontheotherhand,moreaggressivenegotiatorswouldrecommendyourownofLice.Notonlycouldyouconveyyourdominanceandpowerthroughthatdecision,butyoucouldalsouseyourofLicetoincorporateotherpersuasiontechniques.
Forexample,agroupofresearchersshedlightonthe“power”ofbodylanguage.Theyfoundthatbodylanguageassociatedwithlowpower(e.g.,shorterchair,contractedposture)alteredtwohormonesthatgeneratethefeelingofpower:testosteroneandcortisol(Carney,Cuddy,&Yap,2010).
Ifyougiveyourcounterpartashortandawkwardchair,youdecreasetheirtestosteroneandraisetheircortisol.Thosebiologicalchanges,inturn,reducetheirfeelingofpower—whichshouldgiveyouamorefavorabledealinthenegotiation(Kim,Pinkley,&Fragale,2005).
STRATEGY:ENCOURAGECOOPERATIVEBEHAVIOR
InWesterncultures,negotiationhasabadreputation.Peopleperceiveittobeverycombative,whereyou’recompetingagainstyourcounterpart.Onlyonewinnercanemerge.
Sure,thatperceptionisjustaphilosophy.However,thatphilosophyhasinLluencedthenegotiationprocessintheWesternworld.
Becauseonlyonewinnercanemerge,peoplenegotiatemoreaggressively.Ratherthanlookformutualgains—whichwouldbeneLitbothparties—peoplefocusondefendingandreinforcingtheirposition.Unfortunately,that“positionalbargaining”preventsyoufromLindingawin-winoutcome(Fisher&Ury,1981).Bothpartieseventuallyreceiveaworsedeal.
Inotherpartsoftheworld,theperceptionisverydifferent.Peopleperceivenegotiationtobemuchmorecooperative.Insteadofcompetingagainstacounterpart,thetwopartiesworktogethertoreachanoutcomethat’smutuallybeneLicial.
Toenhanceyourdealinthenegotiation,youandyourcounterpartneedtoadoptthatcooperativemindset.Andthissectionwillgiveyouafewtacticsthatcanhelp.
Tac$c7:AvoidNego$a$onTerminologyBecarefulwhenplanningthenegotiationwithyourcounterpart.Yourwordingcanplayapowerfulrole.
Forexample,participantsinonestudybehavedtwiceascooperativelywhenagamewascalled“TheCommunityGame”comparedto“TheWallStreetGame”(RossandWard,1995).Evensimplewordslike“accepting”and“rejecting”cancausepeopletonegotiatemoreaggressively(Larrick&Blount,1997).
Topreventaggressivebehaviorfromyourcounterpart,avoidnegotiationterminology.Alwaysusewordsthatdepictcooperativebehavior(e.g.,“collaborate,”“worktogether,”“brainstorm”).
Youshouldalsoincorporate1stpersonpluralpronouns(e.g.,“us,”“we,”“our”).Thosepronounsemphasizeasharedgoalwithyourcounterpart,soyou’llusuallygainamorefavorabledeal(Perdueetal.,1990).
Tac$c8:ScheduleaFutureInterac$onWhenpossible,breakupthenegotiationintoseparatemeetings.Peoplenegotiatelessaggressivelywhentheybelievethey’llbeinteractingwiththeircounterpartagain(Murninghan&Roth,1983).
Whydopeoplebehavelessaggressively?Pruitt(1998)explainsthatpeopledevelopastrongerneedtoearncooperation:
“When social dilemmas involve repeated interaction over a period of time, people often develop a readiness for mutual cooperation… [This] implies that the only way to succeed is to get the other(s) to cooperate. If one cannot command the other(s), as is usually the case, then this cooperation must be bought with one’s own cooperation.” (pp. 474)
Evenifyouplantoreachanagreementwithinoneday,youcouldplanasubsequentmeetingtoreviewthecontract.Ifyouplanthatsecondmeetingbeforehand,yourcounterpartwillbehavemorecooperativelyduringtheinitialnegotiation.
Starting the Negotiation Allprepared?Great.Nowit’stimetostartthenegotiation.Thissectionwillteachyouafewstrategiesthatyoushouldimplementduringthenegotiation.
STRATEGY:BUILDSOMERAPPORT
Nexttopower,rapportisalsocrucial.Withoutit,negotiationsaremorelikelytofollowthetraditional“win-lose”model—adestructivemindsetforbothparties.
Herearetwotacticsthatcanhelpyoubuildrapport.
Tac$c9:StartWithSchmoozingIntheircleverlytitledstudy,“SchmoozeorLose,”Morrisetal.(2000)studiedhypotheticalemailnegotiations.Theyfoundthat“schmoozing”playedapowerfulrole.Participantsgainedbetterdealswhentheyspokewiththeircounterpartonthephonefor5minutesbeforethenegotiation.
Theresearchersconcluded…
“…small manipulations related to rapport have lasting effects — a 5-min conversation had dramatic effects after a week of e-mail negotiating…schmoozing greases the wheels of sociality and commerce, allowing relationships and deals to develop despite the friction involved in negotiations.” (pp. 99)
Theremainingtacticsinthissectionwillgiveyouadditionalideastoimplementduringtheschmoozingphase.
Tac$c10:DisclosePersonalInforma$onFordecades,researchershaverecognizedthepowerofself-disclosure(Worthy,Albert,&Gay,1969).Whenyoudisclosepersonalinformationtootherpeople,youbuildgreaterrapportwiththoserecipients.
Notsurprisingly,self-disclosureishelpfulinnegotiation.Whenyoudiscloseunrelatedpersonalinformation,yourcounterpartsnegotiatelessaggressively,givingyouabetteroveralldeal(Mooreetal.,1999).
Beforethenegotiationstarts,alwaysmentionunrelatedtidbitsaboutyourself,suchasinterestsorhobbies.Thosetidbits—albeitsmallandinnocent—willmakethenegotiationmoresuccessful.
STRATEGY:BRINGTHEMPASTRIESANDCOFFEE
Don’tbefooledbyitscuteness.Thisstrategyisthemostdeviousstrategyinthisentirearticle.
Whenyoubringpastriesandcoffeetothenegotiation,youaccomplishfourimportanttactics(describedinthissection).
Tac$c11:MimicTheirNonverbalBehavior Whenyoumimicpeople’snonverbalbehavior,youbuildrapportwiththosepeople.ThatLindingiswidelysupportedbyresearch(seeChartrand&Bargh,1999),andit’salsoeffectiveinnegotiation(Maddux,Mullen,&Galinsky,2008).
MimicrycanalsoexplainanotherLinding:negotiatorsgainbetteroutcomeswhentheyeattogether.AsLakshmiBalachandra(2013)explains…
“When individuals eat together they enact the same movements. This unconscious mimicking of each other may induce positive
feelings towards both the other party and the matter under discussion.”
Bybringingpastriesandcoffee,you’llgainbeneLitsofbotheatingandmimicking.
Tac$c12:ProvideanUnsolicitedFavor Inhisbook,InCluence,Cialdini(1987)proposedthatreciprocityisoneofthesixprinciplesofpersuasion.Whenyouperformfavorsforpeople—evenunsolicitedfavors—theybecomesubstantiallymorelikelyto“returnthefavor.”
Thaturgetoreciprocatehasbecomesointernalizedthatwereciprocateevenwhentheotherpartywillhavenoknowledgeofourreciprocation.
Forexample,Burgeretal,(1999)hiredastudenttobeaconfederateinanexperiment.Thestudentaskedpeersto(a)completeasurveyand(b)dropitinaboxoutsidethePsychologyDepartmentafewdayslater.Thesurveywasanonymous,sothestudentwouldhavenoideaifpeopleactuallycompletedit.
Despitethatanonymity,peoplewerethreetimesmorelikelytocompletethesurveyifthestudenthadgiventhemafreebottleofwater.Thatunsolicitedfavortriggeredaninnerneedtoreciprocate,eventhoughthereciprocationwouldn’tberecognized.
Evenifyourcounterparthatespastriesandcoffee,themerefavorwilltriggeraninnerneedtoreciprocate.Asaresult,they’llbemorelikelytomakeconcessionsduringthenegotiation.
Tac$c13:IncreaseTheirGlucoseLevelsGlucoseplaysaroleinaggressivebehavior.Whenglucoselevelsarelow,peoplearemorelikelytobehaveaggressively(Donohoe&Benton,1999).Otherresearchshowsthatincreasingglucoselevelscanreduceaggressivetendencies(Densonetal.,2010).
Sincepastriesandcoffeeincreaseglucoselevels(Lane,2011),theycanreducetheamountofaggressivenessinyourcounterpart.LakshmiBalachandra(2013)explainsthat…
“…the consumption of glucose enhances complex brain activities, bolstering self-control and regulating prejudice and aggressive behaviors.”
Tac$c14:GeneratePhysicalWarmth Researchsuggeststhatwarmbeverages(e.g.,coffee)causepeopletobehavefriendlier.Whenparticipantsinonestudywereholdingsomethingwarm,theymorelikelytogiveagifttoafriend(Williams&Bargh,2008).
Thoseresultsoccurredbecauseoftheinsularcortex.Becauseitprocessesbothphysicalandpsychologicalversionsofwarmth…
“…tactile experiences of physical warmth should activate concepts or feelings of interpersonal warmth. Moreover, [this] should then influence, in an unintentional manner, judgments of and behavior toward other people without one being aware of this influence.” (pp. 3)
Asasidenote,thoseLindingsillustrateanotherbeneLitofnegotiatingatyourofLice:you’llbeabletocontrolthetemperatureoftheroom(andadjustittobewarmer).
During the Negotiation Nowthatyou’vesetagoodfoundation,you’rereadytobegintheactualdiscussion.Thissectionwillgiveyouafewstrategiestoimplementthroughouttheremainderofthenegotiation.
STRATEGY:CONVEYTHEPROPEREMOTIONS
InTactic3,Iexplainedthatyoushouldnegotiateingoodweather.Niceweatherwilltriggerapositivemoodinyourcounterpart,givingyouabetterdealinthenegotiation.
Sinceyouandyourcounterpartshouldbefeelingpositive,shouldyououtwardlyconveyapositivemood?Notnecessarily.
Emotionshavealwaysbeenatrickysubjectfornegotiationresearchers.Luckily,emergingresearchhasshedsomelightonthesituation.Thissectionwillexplainthatresearch.
Tac$c15:ShowSignsofDisappointmentDisplayingapositivemoodcanhelpatthebeginningofthenegotiation(whenyou’reestablishingrapport).However,whenyoustartdiscussingthetermsoftheagreement,visualsignsofdisappointmentorworrycancauseyourcounterparttomakelargerconcessions(VanKleef,DeDreu,&Manstead,2006).
Whydoesthathappen?Researchersarguethatdisappointmenttriggersagreaterurgetocompensate:
“Disappointment and worry, on the other hand, inform the other that one has received less than expected and signal that one is in need of compensation.” (pp. 137 Van Kleef, De Dreu, & Manstead, 2006).
Ifyoufollowthistactic,becareful.Researchalsoshowsthatyourcounterpartwilldevelopamoreunpleasantperceptionofyou.Youmightwanttoconsiderusingthistacticonlyforshort-termrelationships.
Tac$c16:BecomeAngry(WhenAppropriate)Don’tworry.Thistacticcomeswithcaveats.
Regardlessofitscontroversialnature,angerneededtobeincludedsomewhereinthearticle.Atonofresearchhasinvestigateditsroleinnegotiations.
Pastresearchfoundangertobeharmful.Angerprovokesnegativeemotionsfromyourcounterpart,suchasself-centeredness(Thompson&Loewenstein,1992)andretaliatorybehavior(Allred,1999).Thoseemotionscanresultinworseoutcomesforbothsides(Allredetal.,1997).
Inrecentyears,however,thetideshavebeenturning.ManyresearchersarenowLindingpositiveoutcomesforshowinganger.Whennegotiatorsseemangry,theircounterpartsmakelargerconcessionstoavoidreachingadeadlock(VanKleef,DeDreu,&Manstead,2004).
However,thebeneLitsofangerdependontwoconditions(VanKleef,2008).
Condition1:YourcounterpartsmustLindthediscussionimportant,andtheymustrecognize(andmakeinferencesfrom)youranger(Sinaceur&Tiedens,2006).
Condition2:Youremotionalresponsemustbereasonable(Steinel,VanKleef,Harnick,2008).Alwaysdirectyourangertowardtheoffer–neverattheperson.
Similartodisappointment,youshouldonlyshowangerwhenyourrelationshipwiththecounterpartisshort-term(Kopelman,Rosette,&Thompson,2006).
STRATEGY:DEMONSTRATEYOURPOWER
Youincreasedyourpowerbeforethenegotiation.Butwhystopthere?Duringthenegotiation,youshouldalsobeconveyingyourpower.
Thissectiongivesyoutwotacticsthatcanhelpdemonstrateyourpower.
Tac$c17:Men$onYourBATNAsBeforethenegotiation,youenhancedyourBATNAS(bestalternativetoanegotiatedagreement).Inthepast,partiesneverrevealedtheirBATNAs.Researchersbelieveditwasmoreeffectivetowithholdthatinformation(Lax&Sebinius,1986).
Butthatoldschoolapproachisgone.Moreresearchhasuncoveredtheoppositetobetrue.Honesty,especiallyinregardstoyourBATNAs,cancauseyourcounterparttogivelargerconcessions,givingyouabetterdeal(DeRueetal.,2009).
“Negotiators who are perceived to have many (rather than few) alternatives (1) will be considered more attractive negotiation partners, (2) will be less likely to have others negotiate aggressively with them, (3) will more easily reach an agreement, and (4) will capture a higher percentage of the value in negotiations.” (Malhotra & Bazerman, 2008)
HonestyleadstootherbeneLitstoo.Disclosinginformationtriggersaneedforyourcounterparttobecomemorehonestaswell(Collins&Miller,1994).Asaresult,you’llhaveamoreaccurateportrayaloftheirneeds—whichcanleadtobetteroutcomesforbothyouandyourcounterpart.
HowshouldyourevealyourBATNAs?Youcouldsimplyaskhowthecurrentdealwillbedifferentthanyouralternatives.
Ifyou’renegotiatingajob,mentiontheothercompaniesthatyou’vebeenpursuing(andwhatthey’veofferedyou).Askhowthecurrentopportunitywillbedifferent.
Tac$c18:AvoidDisclaimersandWeakLanguageWhenyourcounterpartismorepowerful(e.g.,yourboss),youmightfeelintimidated.Youmightfeelpressuredtousesoftdisclaimers,suchas:
• “Iknowthismightsoundlikealot,but______.”• “Ihatetoaskforthis,but______.”• “Wouldyoueverpossiblyconsider______?”
Neverusethosedisclaimers.Ifyoushowsignsofguilt,yourcounterpartswillactmoreaggressively(VanKleef,DeDreu,&Manstead,2006).You’llwalkawaywithaworsedeal.
Instead,showsignsofconLidenceanddominance.Don’tbeajerk.Neverinsultordegradeyourcounterpart.JustbeLirmandconLidentinyourrequests.PeoplereceivebetterdealswhentheirlanguageandnonverbalbehaviorconveypowerandconLidence(Tiedens&Fragale2003).
STRATEGY:PROPERLYADDRESSTHETERMS
Eventually,you’llneedtoaddressthetermsoftheagreementwithyourcounterpart.Thisstepiscritical.
Becauseofthecombativeperceptionofnegotiation,youneedtopreventyourcounterpartfromdevelopingaLixedpiementality.Youneedtoworkwithyourcounterparttoreachan“integrative”deal.
Buthowcanyoudothat?Inthissection,you’lllearnthebestwaytoaddresstheterms.You’lllearnhowtoensurethatyouandyourcounterpartwalkawaywiththebestdealpossible.
Tac$c19:AddressAllRelevantTermsInnegotiation,yourbiggestenemyisn’tyourcounterpart.YourbiggestenemyisaCixedpiementality.
Considerajobnegotiation.Theemployeroffers$70,000.Butyouwanted$80,000.WithaLixedpie,atleastonepartywouldneedtomakeaconcession.Allelsebeingequal,bothpartieswouldusuallyconcedetothemiddle—inthiscase$75,000.
Thatapproachisn’tgreatbecausetheLinalagreementisusuallyworseforbothparties.However,withtherightapproach,youcanavoidaLixedpiementality(andyoucancreateadealthat’sfavorableforbothparties).
Tounderstand,let’sanalyzetherootofLixedpies.Theyusuallyoccurbecausebothpartiesfocusonasinglemetric(e.g.,salary).ToavoidaLixedpie,youneedtoaddressallterms.Forexample,jobnegotiationsincludemorethanjustsalary.Theyinclude:
• Vacationdays• Commissions• Workingfromhome • Scheduledraises• Otherperks
Bylistingalloftheterms,thenegotiationbecomeslessLixatedonasinglemetric.Withmoretermsonthetable,youcreateLlexibilitytonegotiate.Youmightacceptthe$70,000salaryifyoucanearnahighercommissionandworkfromhometwodaysaweek.
ThenexttacticwillexplainhowtoLindthatextraLlexibilitywithinthelistofterms.
Tac$c20:RankOrdertheTermsOnceyoucreateyourlist,howdoyounegotiatethoseterms?Theresearchisclear:youshouldrankthetermsinorderofimportance(Pruitt,1998).
AsWeingartandOlekalns(2004)explain…
“…information about positions and preferences is more distributive in that it highlights differences, whereas information about priorities is more integrative in that it identifies potential trade-offs.” (pp. 146)
Onceyouandyourcounterpartranktheimportanceofeachterm,youcanspotareasofLlexibility.
• Youmightplacehighvalueoncommissions(becauseofyourstrongworkethic).
• Yourpotentialemployermightplacelessimportanceoncommissions(becauseitmeansyougeneratedasale).
Byreviewingtheimportanceofeachterm,youcanLindthoseareasofLlexibility
Here’saLinaltip.Youshouldneverresolvetermssequentially.Inotherwords,don’tresolvesalary,THENcommission,THENvacationdays.Resolveeverythingatonce.
Whenyoulumpeverythingtogether,youretainbargainingpower.Youcanmakeconcessionsinlessimportantareassothatyoucanreceivegreatervalueinmoreimportantareas.
Ending the Negotiation So,you’vediscussedtheterms…nowwhat?Howdoyouhandletheoffer?Thissectionwillteachyouthebestwaytoapproachthatpartofthenegotiation.
STRATEGY:ANCHORYOUROFFER
Popquiz…didGandhidiebeforetheageof140?
Yes?Okay.NowestimatetheexactagethatGandhidied.
Believeitornot,yourestimatefortheexactageisartiLiciallyhigherbecauseofyourexposureto140yearsold(Strack&Mussweiler,1997).
ThatinLluencestemsfromanchoring,anextremelypowerfuleffectinourjudgments(Tversky&Kahneman,1974).Howstrongisit?Evenifyouwerealreadyfamiliarwithanchoring,youstillwouldhavebeeninLluencedbyit(Wilsonetal.,1996).
Ifyouwanttounderstandthemechanismsbehindanchoring,youcanrefertomybook,MethodsofPersuasion.Thisstrategywilljustpresenttwotacticsthatapplyanchoringinnegotiation.
Tac$c21:MaketheFirstOfferSomepeoplearguethatyoushouldwaitforyourcounterparttomaketheLirstoffer.AdamGrant,authorofGiveandTake,arguesagainstthatapproach:
“When I poll executives, more than three quarters believe that it’s usually best not to make the first offer…There’s only one problem with this assumption: it’s wrong. One thorough analysis of negotiation experiments showed that every dollar higher in the first offer translates into about 50 cents more in the final agreement.” (Grant, 2013)
Inmostcases,youshouldmaketheLirstoffer.You’llgettwomainbeneLits:
Bene[it1:IncreaseYourPerceivedValue Thehighanchorpointprimesyourcounterparttofocusonthebestqualitiesaboutyouroffer.Inarealestatecontext…
“…a high list price directed real estate agents' attention to the house's positive features (such as spacious rooms or a new roof) while pushing negative features (such as a small yard or an old furnace) to the back recesses of their minds.” (Galinsky, 2004)
Thesameoutcomeoccurswithothernegotiations.Ifyourequestahighsalary,forexample,suddenlyyourbestqualitiesbecomeafocalpoint.EveniftheLinalsalaryisbelowtheexactanchorpointyourequested,thatprimingmechanismpullstheLinalsettlementclosertothatpoint.
Bene[it2:YouSecureTheirOutermostRange Theanchoringeffectisalsocalledtheanchoringandadjustmentheuristic.Whenwe’reexposedtoananchorpoint,weoftenstartfromthatanchorandthenadjustourjudgmentaccordingly.
Ifyou’renegotiatingasalary,youremployerlikelydeterminedarangeofpossiblesalariesbeforethenegotiation—perhapsbetween$60k-$75k.Whenyouprovideahighanchorpoint(e.g.,$80k),youremployerwillstartat$80kandadjusthisofferuntilreachingtheoutermostvalueinhisrange—inthiscase$75k(Epley&Gilovich,2006).
Withoutananchor,theLinalsettlementwouldlikelysettlenearthemidpointofhisrange—inthiscase$67.5k(whichis$7.5klessthanyouwould’vereceived).
Tac$c22:RequestaHighPreciseRangeNowthatyouunderstandtheimportanceofanchoring,howshouldyoudoit?
InarecentstudyatColumbia,AmesandMason(2015)examineddifferentmethods.Supposethatyouwantan$80ksalary.Hereareyouroptionswhenmakinganoffer:
• BackdownRange:Yourequest$70k-$80k(withyourtargetatthetop)
• BracketingRange:Yourequest$75-$85k(withyourtargetinthemiddle)• BolsteringRange:Yourequest$80k-$90k(withyourtargetatthebottom)• BumpUpPoint:Yourequest$90k(asinglehighanchorpoint)
Theresearchersfoundthatyou’llgetthehighestsalarywhenyouuseabolsteringrange.
Comparedtoasingleanchor,rangesseemlessrigid.You’remorelikelytoreachanagreement(andtheagreementwillalsobehigher).
Here’sanothertip.Youshouldalsorequestapreciserange(e.g.,$81kto$84k).Researchhasfoundthatprecisevaluescausepeopletoadjustshorterdistancesfromanchorpoints(Thomas&Morwitz,2008).Whenyouranchorisprecise,yourcounterpartwillremainclosertoit.Iexplainwhyinthispricingtactic.
STRATEGY:FRAMEYOUROFFER
It’sapainfultruth.ButresearchersareLinallystartingtoacceptit…
Humanbeingsareirrational.
ThankstopioneeringworkfromAmosTverskyandDanielKahneman,weknowthatthemereframingofamessagecanmakeahugedifference(Tversky&Kahneman,1981).
Considertwomessagesthatwerepresentedinahospital:
• Handhygienepreventsyoufromcatchingdiseases.• Handwashingpreventspatientsfromcatchingdiseases.
Bothmessagesaretryingtoachievethesameoutcome:handwashing.Despiteasmalldifference(i.e.,changing“you”to“patients”),thesecondmessageinLluencedmorestafftowashtheirhands,reducingthespreadofdisease(Grant&Hofman,2011).
Innegotiation,framingcanhavepowerfuleffects.ThissectionwillteachyouspeciLicframesthatwillhelpyousecureabetterdealinanynegotiation.
Tac$c23:SeparateGains/CombineLossesWhichoptionwillmakeyouhappier:
• YouLinda$20bill• YouLinda$10bill,andthenyouLindanother$10billlater
Bothoutcomesarethesame.However,mostpeoplefeelgreatersatisfactionwiththesecondoutcome(Thaler,1985).
Butlet’slookattheoppositeside.Whichoptionwillmakeyoufeelworse:
• Youlosea$20bill• Youlosea$10bill,andthenyouloseanother$10billlater
Withthoseoptions,thesecondoptionmakespeoplefeelworse.Itturnsout,peopleprefertogainvalueinincrements,buttheyprefertolosevalueinonelumpsum.
Youshouldfollowthatguidelineinnegotiations.ConsiderthefollowingbeneLit:
• Theprojectwillbecompletedunderbudgetandaheadofschedule
Withsomestrategicrewording,youcouldseparatethatbeneLitintosmallerpieces:
• ThecompletedprojectwillfulLillallofthequalityrequirements
• Theprojectwillbecompletedunderbudget• Theprojectwillbecompletedaheadofschedule–nolaterthanMay3
Voila.YoujustturnedonebeneLitintothree.WhetheryoupresentthosebeneLitsinwritingorwhetheryoupresentthematdifferentpointsinthenegotiation,yourcounterpartwillperceivegreatervalueinthedeal(Malhotra&Bazerman,2008).
Theoppositeistrueforrequests.Whenyoupresentrequests—thetermsthatyourcounterpartmustgiveup—youshouldaggregatethoserequestsasmuchaspossible.Thelumpsumwilltriggerlesspain.
Tac$c24:CreateaVisualBalancePeopledon’tcareaboutabsolutevalue.Theycareaboutrelativevalue—howmuchtheyreceiveincomparisontoyou.
Inonestudy,researchersaskedpeopletoparticipateinanexperiment:
• Onegroupwasoffered$7.• Asecondgroupwasoffered$8(buttheyweretoldthatotherparticipants
wouldbepaid$10).
Eventhoughthesecondgroupwasofferedmoremoney,theywerelesslikelytoparticipate(Blount&Bazerman,1996).
Howdoesthatrelatetoyou?Whenstructuringyouragreement,youneedtocultivateasenseofequality.
Shouldn’tequalityalreadybeagoal?Yes—absolutely.Nonetheless,youshouldstillreinforcethatperceivedequality,evenwhenadealistrulybalanced.
Toreinforceit,youneedtoconsideracommonheuristic.Peopleoftenjudgethevalueofadealbasedonasimpleruleofthumb:thevisuallengthofbeneLits(Petty&Cacioppo,1984).
Intheprevioustactic,youseparatedbeneLitsintosmallerpieces.WhenpresentingthosenumerousbeneLitsinwriting,alwaysmaintainavisualbalance.YourlistofbeneLitsshouldneverseemvisuallylongerthanyourcounterpart’slist.
Tac$c25:Jus$fywithGraphsInadditiontothelengthofbeneLits,anothercommonheuristicisjustiLication.WhenyouprovidejustiLication—anyformofjustiLication—yourcounterpartismorelikelytoacceptthatjustiLicationasvalid.
Inaclassicstudy,peopleaskedtocutinlineatacopier(Langer,Blank,&Chanowitz,1978).Considerthreedifferentrequeststhattheyused:
TheLirstandsecondrequestswereessentiallythesame.Ifyouneedtousethecopier,obviouslyyouneedtomakesomecopies.However,thesecondrequestgarnered93percentcompliance,whereastheLirstrequestonlygarnered60percentcompliance.
TheresearchersconcludedthatthemerepresenceofjustiLication(suchasincludingtheword“because”)makesyourmessagemorepersuasive.Peopleautomaticallyassumethatyourmessagehasmorecredence.
Here’sanothertip.ToenhancethepersuasivenessofyourjustiLication,youshouldalsoincorporateelementsofscience.Researchshowsthatthemerepresenceofscience-relatedreasoning(e.g.,charts,graphs,formulas)enhancesthepersuasivenessofamessage(Tal&Wansink,2014).
STRATEGY:COUNTERTHEIROFFER
Finally,let’sdiscusscountering.Towardtheendofthenegotiation,you’lllikelyencounterresistance.That’snormal.Thissectionwillexplainafewtechniquestohelpyouovercomethatresistance.
Tac$c26:AskDiagnos$cQues$onsYoumakeanoffer.And,loandbehold,youencounterresistance.Yourcounterpartgivesablatant“no.”Noreason.Norhyme.Justno.
Tomaketheproperadjustment,youshouldaskdiagnosticquestions:who,what,where,when,why,how.Althoughthistacticissomewhatgroundedincommonsense,youneedtounderstandwhythere’sresistance.
Supposethatyourbossrejectsyourrequestforaraise.Youshouldaskforthereasonbehindthatdecision.Maybeit’sduetothebudget.Maybeit’sduetoyourperformance.Whateverthereason,youneedtoknow.
Onceyougetyouranswer,youcanpivotyourquestionsaccordingly.Ifthereasonisbasedonbudget,youcanaskwhenthebudgetwillopenup.Ifthereasonisbasedonperformance,youcanaskwhatitwilltaketoearnthatraise.
Tac$c27:AlwaysCounterTheirFirstOfferWhatiftheybeatyoutothepunch?WhatifyourcounterpartmadetheLirstoffer?Inthatcase,alwayscounter.Counteringisgoodforyouandyourcounterpart.
Counteringcanobviouslygiveyouabetterdeal.Butwhywoulditbegoodforyourcounterpart?Wouldn’titbebad?
Sure,you’llprobablydevaluethedealthattheyreceive.However,Galinskyetal.(2002)foundthatyourcounterpartswillactuallybehappierwiththedeal.
IfyouaccepttheirLirstoffer,theyexperiencenegativeemotions—asiftheycouldhavereceivedabetterdeal.Andthosenegativefeelingsareoftenmisattributedtoyou.
Ontheotherhand,whenyoucountertheirLirstoffer,yourcounterpartswillfeelmorepositiveaboutthenegotiation—asiftheyreceivedthebestpossibledeal.
Whatifyourcounterpartiscounteringyourinitialoffer?ShouldyoualwayscountertheirLirstcounteroffer?
Nevercounterforthesakeofcountering.Alwaysevaluatetheircounterofferobjectively.Considerthebenchmarkdata.Considerthedealthatyouwerehopingtosecure.Iftheircounterofferisgenerous—anditmatchesyourintendeddeal—thenacceptit.Ifnot,thenkeepnegotiating.
Whatifyourcounterpart’sinitialofferisextremelygenerous(andyoureallydon’twanttocounter)?Thenyoushouldusethenexttactic.
Tac$c28:PauseAberTheyMakeanOfferIfyourcounterpart’sofferisverygenerous(andyou’retooscaredtocounter),then—attheveryleast—pausebeforeacceptingit.Pausingcanreducethenegativeemotionsthatyourcounterpartwouldexperiencefromyourimmediateacceptance.
Pausingcanalsobegreatwhenyourcounterpartrejectsyourinitialoffer.Kwon(2005)explainsthatimmediateconcessionscanmakecounterpartsfeeluneasy,asifyourvalueisoverinLlated:
“…concessions, especially immediate ones, will be interpreted as signaling a defective or overpriced object that the other party is trying to unload rather than a conciliatory move designed to aid the focal negotiator.” (pg. 4)
Whenyoupausebeforemakingaconcession,yourreluctancewillhelpretaintheperceivedvalueofyouroffering.Youwon’tseemasdesperate.
Inaddition,pausingcanalsobehelpfulwhenyouacceptanoffer.Infact,ithelpedGeoffreyJamesearn$18,000insevenseconds.
Yoursilencemakestheotherpartyfeeluncomfortable.Insomecases,yourcounterpartmightinterjecttoadjusttheoffer:
• Counterpart:We’reofferingyouan$85,000salary.• You:[pausefor5-7seconds] • Counterpart:If$85,000istoolow,wecangoupto$90,000.
Iftheyinterject,that’sgreat!Youjustincreasedthesizeofyourdeal.
Ifnot,thenyoucaneitheracceptorcounter.Eitherway,yoursilencewasmerelyamomentforyoutopondertheoffer.Noharmdone.
After the Negotiation Congrats!Youreachedanagreement.So…nowwhat?Thissectionwillexplainwhatyoushoulddoimmediatelyafterthenegotiation.
STRATEGY:FINALIZETHEDEAL
Eventhoughyoureachedanagreementduringthenegotiation,you’llwanttoLinalizethatagreementasquicklyaspossible.Hereareafewtacticsthatcanhelp.
Tac$c29:FollowUpWithanEmailSummaryVerbalcontractscanbebinding.Evenifyoudon’tdraftawrittenagreement,yourcounterpartcanstillbeheldtothetermsthatwerediscussed.
Nonetheless,youstillwantwrittenproofasquicklyaspossible.Immediatelyfollowingthenegotiation,followupviaemail.Thankyourcounterpartfortheopportunitytomeet,andsummarizethemaintermsthatyoudiscussed.
Ifyoucansecurearesponsetothatemail,you’llhavewrittenproofinthemeantime.Thatemailcansavethedayifyourcounterpartexperiencesa“memorylapse”beforetheLinalcontractisdrafted.
Tac$c30:ComplimentTheirNego$a$onSkillsPopquiz...whatwillmakeyourcounterparthappywiththedealtheyreceive?
Mostpeopleguessthattheeconomicvalueisthestrongestfactor.Wouldn’tpeoplebehappieriftheyreceivemoremoney?
You’dthinkso.However,there’sastrongerfactor.It’stheirperceivedperformance—howwelltheybelievetheyperformedinthenegotiation.
InalongitudinalstudyofMBAgraduates,researchersfoundittobeastrongerpredictorofjobsatisfaction,salarysatisfaction,anddecreasedturnover(Curhan,Elfenbein,&Kilduff,2009).PeopleweremoresatisLiedwiththeirjob(andstayedlonger)iftheybelievetheyperformedwellinthejobnegotiation.Theactualsalarieshadnoeffect.
Afteranynegotiation,youshouldcomplimenttheotherpaty’snegotiatingskills.NotonlywillyourcounterpartbemoresatisLiedwiththedeal,butheorshewillalsobemorelikelytosignthepaperworkandnegotiatewithyouagaininthefuture(Curhan,Elfenbein,&Eisenkraft,2010).
Tac$c31:BetheFirsttoDrabtheContractWhenpossible,youshoulddraftthecontract(ratherthanyourcounterpart).
Sure,itcouldhelpyousolidifyanagreementmorequickly.However,there’sanothermajorbeneLit.Bydraftingthecontract,youcancreatedefaultoptions.
Whenweencounteranoptionchosenbydefault,weusuallyacceptit.Forexample,JohnsonandGoldstein(2003)foundthatcountriescouldpotentiallydoubletheirrateoforgandonationbyusinganopt-out(ratherthanopt-in)method.
Similarly,ifyoudraftthecontract,youcontroltheterms.AsMalhotraandBazerman(2008)explain…
“…the party who introduces its boilerplate contract will have a significant advantage in the negotiation: even strategically placed defaults on important contractual elements (such as contract length, penalties, and termination clauses) are likely to be stickier when they are pre-written into the contract...” (pg. 18)
Donotbemanipulative.Neversneaktermsintoanagreement.That’sconsidered“proceduralunconscionability,”whichwillvoidtheagreement.Nottomentionit’sblatantlyunethical.
Instead,whenyoueventuallypresentthecontracttoyourcounterpart,mentionthoseadditionalitems.Sincethoseoptionswillbethedefault,yourcounterpartwillstillbemorelikelytoacceptthem.
Conclusion Welp,ifyoureadtheentirearticle,Iapplaudyou.AndIalsohopethatyoufoundsomeusefulnegotiationtactics.
And,asalways,useyourjudgmentwhenimplementingthosetactics.Don’tblindlyuseatechniquesimplybecausethearticletoldyoutouseit.Alwaysweightheprosandconssothatyoucandeterminewhetheraparticulartacticmakessenseforyoursituation.Everysituationisdifferent.
Andifyou’restillhungryformorepsychologicalcontent,youcancheckoutmyhugepricingarticleormybook,MethodsofPersuasion.