As I have mentioned earlier I am a member of the American consulate Library here in Mumbai. A month after I took membership, my husband also did. However, being more of a digital reader it was only a few weeks back that for the first time he looked at some books and borrowed them on his card. One of the books being – Secrets of Power Negotiating by Roger Dawson.
Some days back I saw the book lying on a table in our house. It was serendipitous that me and the book met. Once I got in, I was hooked. While I had been working on another book to share it with my readers, this book made me sit up and ensure that it went right up in the queue.
As founder of the Power Negotiating Institute, Dawson is well known as one of the experts in power negotiating.
What is Power Negotiating?
We don’t realize but in multiple aspects of our lives we end up negotiating. As kids, we negotiate with our parents for more liberal allowances. As shoppers, we negotiate with the sellers for better prices, at least in flea markets. As employees, we negotiate on our salaries. As spouses, we negotiate on the compromises to be made by one another. Negotiation is a way of life.
Roger Dawson defines Power Negotiating as a skill set which teaches you how to win at the negotiating table, but leaves the other person feeling that he or she won. That’s a win-win in any book!
The book was an eye-opener for me. It’s simply laid out with short chapters and a concise “Key Points to Remember” at the end of each one. While I have seen a lot of things in action, especially with my mom bargaining at every possible point, getting them all in one place and laid out in such an easy manner was a delight.
I have chosen to cherry pick a few of the vital lessons I picked up from the book so you can apply it in your lives.
1. Ask for more than you expect to get
This might sound like counterintuitive advice initially and to some, it even sounds unethical. However, Dawson gives some very valid reasons to follow this tenet of power negotiation. When we ask for more than we expect to get, we are opening the door for negotiation and also helping build an environment for the win-win situation where the other person gets to bring you down and you still end up with what you expected. Most importantly, when you ask for more than you expect to get, often you could end up getting that more easily.
2. Never Say yes to the first offer
The second word of the term Power Negotiation connotes that negotiation is a vital part of it. If you say yes to the first offer, it often triggers two thoughts – the other person feels he could have done better or that there’s something wrong.
Let’s look at an example. You have zeroed in on a second-hand car listed by a seller. The price quoted is Rs. 3 Lakh. You go there, check out the car and like it. However, you tell the seller you will pay only Rs. 2 Lakh. He doesn’t protest at all and agrees to it in the first shot. Aren’t you likely to feel the above mentioned two thoughts?
3. Avoid confrontational negotiation
Dawson warns us against arguing as part of a negotiation. As an alternative, he gives us what he calls the Feel, Felt, Found formula where he suggests initially agreeing with the other party’s objection but then turning it around.
Continuing with the car example, suppose at your offer of Rs. 2 Lakh, the other person said that it is a well-maintained car for which he himself paid Rs. 5 Lakh just five years back. Now you could either argue or you could first agree with him and compliment him on how well he has indeed maintained the car. Then you could gently point out that within 5 years, with an appropriate rate of depreciation, this is the fair price and the price most commonly quoted on the online marketplace as well.
Confrontational negotiation uses arguments and threats whereas Power Negotiation conducts proceedings in an amicable environment for a win-win result.
4. Never Offer to Split the Difference
When negotiating, two sides value the same product or service at different amounts and they end up coming to a middle point. One way often adopted is to split the difference. When done more than once, the difference doesn’t remain even. This post presents a counter view on why you should never agree to split the difference.
In the car example, at your suggestion of Rs. 2 Lakh, you keep mentioning that the difference is only Rs. 1 Lakh. Finally, the seller says, let’s come to a compromise and split the difference. You look thoughtful and ask him for a minute to consult your husband. Then you come back to the seller looking downcast telling him you were delighted to pay Rs. 2.5 Lakh but your husband refuses to let you pay anything more than Rs. 2.2. You mull and say that how you wish you didn’t have to leave the car for a mere Rs. 30,000 The seller feels bad and wants to get rid of his car. He offers to split the difference again with the final price being Rs. 2.35 Lakh and you agree.
With this Power Negotiation, the seller is bound to believe he got a decent enough deal because he made you split the difference twice.
5. Always ask for a trade-off
Dawson advises that as a Power Negotiator, never make even the slightest concession without getting something in return. However, be open in this process rather than demanding for something specific. Simply, ask what you can get in return.
For instance, the car seller tells you that he does not have the extra tyre for the car, you tell him what can he give in return instead? For all you know he gets the seat cover or the stereo replaced. Beware, do not argue on this point or make it confrontational. Even if you are not able to come to an agreement on the trade-off, make sure the other party knows they owe you.
6. Good guy/Bad guy
This is such a common tactic that we often use it in our day to day conversations too. This works only with a minimum number of two people in a negotiation party where one person acts as a party pooper while the other acts as the one being the better person in the negotiation.
Suppose you went with your husband to buy the second-hand car. When the seller offers to split the difference, your husband puts his foot down and refuses. You try your best, in front of the seller, to reason with him and tell him how the price makes sense. He then refuses to let you pay more than Rs. 2.2 Lakh. Basically, he makes you look like an easier negotiating party.
7. How to Taper Concessions
When you make concessions to your initial price, Dawson has some time-tested ways that you should be doing it. Two most important pointers – no equal concessions as it creates a pattern in the other persons head and don’t make your last concession too big as the other person/party will always think you had scope to cut down more. In fact, make your concessions smaller and smaller. Negotiations Ninja does a good job of expanding on this thought.
While buying that second-hand car, you started by quoting a price of Rs. 2 Lakh whereas the seller’s price was Rs. 3 Lakh. You finally budge a little and say that you can manage Rs. 2.2 Lakh. After some more conversation, you take it up a notch to 2.28 Lakh. Then finally you tell him Rs. 3000 more is all you can add and end it at Rs. 2.31 Lakh.
8. Acting Dumb is Smart
Most humans have a sense of wanting to help out another fellow human being. As per Dawson, when you act dumb, the other person will feel obliged to help you out and even feel good about the negotiation and how it goes.
When you go to check out the car, maybe you ask for a demo of the controls or when you see the machinery under the bonnet get some tips. It might get some subtle changes in the other party.
9. Time Pressure
When faced with a time pressure, most negotiators end up making more concessions. As Dawson puts it in terms of Pareto Principle, 80% concessions happen in the last 20% time. Ideally, never reveal if you have a time pressure and try and gauge if the other person has a deadline for himself. Read more about what Dawson himself, has to say on the matter.
Suppose the car seller tells you he has a new car delivery the next day and you realize he really has only one parking space, that is a time advantage on your side. You could end the day’s negotiation without driving away the car, knowing that there is no other buyer and that the seller will be more open to making concessions.
10. Information Power
Having information about the other party or details about the deal is extremely important. It gives you some leeway and more negotiating space. Also, never assume you have all the information. Always ask even what you might be thinking is a dumb question.
Suppose you are chatting away with the car seller, and you casually ask him why he is selling the car. He just tells you that he is moving to a new country and looking to take minimum things with him. You are now aware of your bargaining power in this negotiation.
11. Body language: How to read people
Body language is one of the most important things that you can notice during a negotiation. However, Dawson cautions against taking every little change at face value. His advice is to notice the change in body language or especially the small unconscious changes while talking.
Funnily enough, in a meeting some days when a new marketing agency was pitching to us, I decided to consciously notice the guy doing the talking. When I asked about how old the agency was and some of the good work done, he started telling me about the first two big substantial projects. Somehow, he also kept touching his nose which is universally taken as a body language evidence of lying. Thankfully, while talking about the recent case studies touching the nose did not happen at all, giving me more confidence in the agency.
This post covers probably 15-20% of the value that reading the book can give you. If you can lay your hands on it, and more importantly act on the ideas put forth by Dawson, you are bound to become a better Power Negotiator.
Have you tried any of the above mentioned things? Is there a particularly favourite tactic that you use while negotiating? Let me know in the comments below.