Negotiating Techniques PDF

Negotiatin g Techniqu e Paul W. Fulbright, MBA, JD, LLM Assistant Professor of Business Law © 2018-2025 Law Office of Paul W. Fulbright, PLLC  Overview 1. Overview. 2. Technique #1: Understanding Legal v. Illegal DECEPTION. a. What IS a Material Misrepre...

Negotiatin g Techniqu e Paul W. Fulbright, MBA, JD, LLM Assistant Professor of Business Law © 2018-2025 Law Office of Paul W. Fulbright, PLLC  Overview 1. Overview. 2. Technique #1: Understanding Legal v. Illegal DECEPTION. a. What IS a Material Misrepresentation? b. Different Kinds of Statements and Representations c. Key Lessons for the Executive 3. Technique #2: Improving your Verbal and Non- Verbal COMMUNICATION SKILLS. a. Verbal Communication b. Nonverbal Communication 4. Technique #3: Recognizing TACTICS. a. The Players b. Making Big Plays c. A Game of Inches 2  Overview: NEGOTIATING TECHNIQUES. Overview Comments: First, computers don’t negotiate; people do. As stated previously, analysis is important. But the ability to effectively communicate (to be able to listen, speak, not speak, emote, and not emote) is important too. Second, to be effective at good-faith contractual negotiation, negotiators must be able to demonstrate both a commitment to honesty and an ability to deceive. In some situations, it is critical that you be able to answer uncomfortable questions truthfully, even though it might hurt your negotiating position. In others, you can (and are expected to!) deceive. The ability to do both of these very contrary things is critical. Third, certain issues and tactics arise again and again. We’ll Address Three (3) Topics regarding Negotiating Technique: 1. Understanding Legal v. Illegal DECEPTION: All negotiators deceive, but it’s critically important to understand what is (and is not) legal; 2. Improving your Verbal and Non-Verbal COMMUNICATION SKILLS: the words you choose convey only a small part of your message; and  Technique #1: UNDERSTANDING DECEPTION (Legal v. Illegal) The MATERIAL MISREPRESENTATION: Renders the Contract Unenforceable. The REQUIREMENTS of a VALID CONTRACT: In business law courses, one learns about the requirements of a valid contract. Generally speaking: (1) the parties have to have genuinely assented (agreed) to specific terms; (2) each party must have agreed to do something (or refrain from doing something) it wasn’t already legally required to; (3) the parties have the capacity to enter into the agreement (for example, neither is a young child); and (4) the agreement is for a legal purpose. These requirements generally are NOT difficult to meet. Must a Contract be IN WRITING? Sometimes, yes, but this is rarely a problem.: In almost every state, a law called the “Statute of Frauds” lists certain kinds of contracts that MUST be in writing to be enforceable. The most common examples are: (1) contracts for a sale of land; and (2) contracts that expressly last longer than 1 year. If you enter into such a contract orally, even if it’s valid, you can’t “enforce” it in court, because it’s not in writing. However, as a practical matter, this writing requirement is rarely a problem. 99% of business contracts ARE in writing (regardless of whether it’s required or not), because we all know it’s a safer way to go. The MATERIAL MISREPRESENTATION: Another MUCH MORE COMMON way a  What IS a Material Misrepresentation? How to RUIN All of your Hard Work in Negotiating a Contract in 1 Easy Step: Make a MATERIAL MISREPRESENTATION. What IS a “Material Misrepresentation”?: Typically, a material misrepresentation is a representation that: 1. is factual (relates to verifiable facts, not opinions) 2. is “material” (that is, it’s important = for example, it relates to a basic assumption of the contract OR it significantly affects the value of the contract); and 3. was reasonably relied upon by the other party when entering the contract. Notice – NO “Intent to Defraud” is Required !!!: That’s right. The other side can “get out” of the contract (render it unenforceable) if it can show that you made a Material Misrepresentation during the negotiation. And it can do this even if: (a) you had no intent to mislead anyone; AND (b) you were trying to be careful / responsible in what you said or wrote. Bottom Line: WE JUST  Different Kinds of Statements and Representati Distinguishing REPRESENTATIONS from MISREPRESENTATIONS from MATERIAL MISREPRESENTATIONS. ons #1: STATEMENTS OF FACT that are IMPORTANT and INCORRECT – This is a Material Misrepresentation that Renders the Contract Unenforceable: Distinguishing FACTS from OPINIONS: As a general matter, Facts are objectively measurable things (you can measure them with numbers or %ages). Opinions are statements of judgment (based on, or inferred from, various facts). Generally, Statements statements about Important of opinion (“Material”) cannot be measured Facts that or proven are Incorrect with certainty. can be a Misrepresentation that would render a contract Material. unenforceable SEE BELOW 3 EXAMPLES OF MATERIAL MISREPRESENTATIONS: When Buyer asked, “Have you ever seen or heard anything that would raise a question about the condition of the transmission in the car?”, the Seller lied by saying “No.” (as his mechanic told him the transmission was shot and would soon require expensive repairs). “These tires will last 50,000 miles.” (note: Seller was mistaken - he honestly believed the tires were designed for 50,000 miles, but, in fact, they were rated Seller’s beliefs, for only 10,000 understanding, or intent, the diamond is only 1.5 miles) 6 “This diamond carats in size) ring features a diamond that is 2.1 carats in size.” (when,  Different Kinds of Statements and Distinguishing REPRESENTATIONS from MISREPRESENTATIONS from Representati MATERIAL MISREPRESENTATIONS. #2:ons OVERALL OPINIONS OF VALUE – In General, These are Widely Accepted in Negotiation: Example: You are the SELLER. You’re selling your used car. You’ve carefully consulted used car guides, a mechanic, local listings of cars of the same make, model, year, mileage, and condition, and you genuinely believe that the fair market value of your used car is precisely $21,000. The BUYER asks you the following question: The “What do: you Can think you LEGALLY answer with the inflated value it’s worth?”. ? ISSUE : Ye “$25,000” Answe. Reason: The overall value of the car is what is being negotiated, r almost s and always a there RANGE is of values that a willing seller and buyer might agree to (depending on many factors and circumstances). In North America (and many Western Democracies), you’re not expected to be 100% open, honest, and transparent here. You’re not expected to help the other side (essentially negotiating against yourself) by telling them what YOU personally believe the car is worth. The PURPOSE of the negotiation is to determine what it’s worth to both this Seller and this Buyer. Back-and-forth offers and counter-offers are “positioning” or “negotiating” statements, and they are NOT treated as Material  Different Kinds of Statements and Representati Distinguishing REPRESENTATIONS from MISREPRESENTATIONS from MATERIAL MISREPRESENTATIONS. ons #3: STATEMENTS OF OPINION – “PUFFERY” – In General, These are Widely Accepted in Negotiation: Distinguishing Facts from “Puffery”: To understand what “puffery” is, think about the kinds of statements that frequently come from salesmen – imprecise, exaggerated, opinion-oriented, emotional, all about the attractive qualities “Puffery”ofis the goods or service. Commonplace among Salesmen, and it is NOT a Misrepresentation, Material because NOBODY takes these Statements. Seriously Examples: “This ring is perfect for you.” “These tires will last forever.” But Notice: Material Facts and Puffery can be Mixed: Example: “This ring is perfect for you. The diamond in it is 2.1 carats in size.” The first statement is puffery, and it can’t be the basis of a lawsuit. The second statement is an important (“material”) factual representation, and it certainly can be the basis of a lawsuit if it isn’t true.  Different Kinds of Statements and Representati Distinguishing REPRESENTATIONS from MISREPRESENTATIONS from MATERIAL MISREPRESENTATIONS. ons #4: STATEMENTS OF “EXPERT” OPINION – If False, these can be a Material Misrepresentation: What’s an “Expert”?: An expert is a person who is qualified by education, experience, training, or skill to tender opinions (judgments) on matters outside the expertise of ordinary people. An Expert Opinion, if False, can serve as a Material Representation. Example: Expert A makes the following statement to Buyer on behalf of Seller: “I’m a mechanical engineer, with a Ph.D., and I have 20 years of experience in compressor technology, and, in my opinion, that compressor (if properly maintained) will run safely and continuously for approximately 50,000 hours.” If, in fact, Expert B could demonstrate that Expert A has made a mistake and that the compressor would actually only last 1,000 hours, then  PRACTICE PROBLEMS RE MISREPRESENTATIONS Consider the Following Situations: 1. Affirmative Misstatement: A party makes an affirmative misstatement of fact. 2. Incorrect Answer: A party answers a question incorrectly. 3. A Party is Silent: He says nothing about a matter that is highly material (i.e., the other side should ask about it). However, he is asked nothing, and he says nothing. 4. A Party is Silent, but there is a Legal Duty to Disclose: Same as Item 3, but some law creates an affirmative duty to disclose. Example: laws relating to the sale of real estate often require the Seller to fill out a “Seller’s Disclosure” listing “anything that may materially affect value”. A party is silent. He says nothing about a matter that is highly material (i.e., the other side should ask about it). However, he is asked nothing, and he says nothing. 5. Concealment: A party conceals (or hides evidence regarding) a material fact. 6. Half-Truths: A party answers a question in a way that is literally correct, but conveying only part of the truth, so it is misleading (tendering what is often called a “half-truth”). Example: “Have prices for ownership of these condominiums stabilized?” “Yes.” (at zero). 7. Failure to Supplement: A party fails to supplement (correct) a prior answer in light of newly discovered facts.  PRACTICE PROBLEMS RE MISREPRESENTATIONS So, What Have We Learned about “The Rules” regarding Negotiation?: In the absence of an affirmative duty to disclose (created by law) or some kind of special relationship (that creates a special duty to disclose): Party A absolutely MUST avoid making affirmative misrepresentations. Party A should avoid “volunteering” information if Party B doesn’t ask. But, if Party B asks, or if Party A volunteers, then A must speak accurately, and avoid half-truths, and avoid failing to supplement. Generally Speaking, if YOU are the Buyer: Ask Questions, Ask Questions! Generally Speaking, if YOU are the Seller: When you Answer Questions, you can choose between TWO options: Option #1: “No Comment.” OR  Key Lessons for the Executive The Key Executive Lessons / Take- Aways: General The more SPECIFIC, the more clearly WRONG your statements are, and likely the other sidethe Principle: is to more RELY ON THEM, the more likely you are to get. into Speaktrouble and Write Responsibly: You must be very careful about what you say & write in negotiation, because, if it’s later shown to be incorrect, it could be viewed as a Material MISrepresentation (and, thus, a way for the other side to get out of the contract). Typical Roles: The Buyer should Ask, Ask, Ask: The Buyer in a transaction should generally ask lots of questions (in the presence of witnesses), get as many statements made as possible in writing, and Keep the Seller Talking. Typical Roles: The Seller may Remain Silent. If Seller Speaks, (s)he should: (a) Answer Questions Accurately & Briefly; and (b) Then, Shut Up, Shut Up, Shut Up: Generally speaking, the Seller wants to try to avoid talking / volunteering information. However, if the Buyer asks a question, and the Seller answers, (s)he should answer the question accurately and briefly (no word games, no evasions, no half-truths). These Roles can be Reversed: SMART Sellers ask Qs too! The same rules apply in reverse. Seller should Ask his Lawyer if there are any Affirmative Duties to negotiators Disclose: Inasksometheir situations, lawyers ifthe there Seller areisany required similarbylaws law that to inform they must the Buyer comply with. even if the Buyer doesn’t ask. Example: In most states, a Seller of a1 about issues  Technique #2: Improving Your Verbal and Non- Verbal COMMUNICATION SKILLS Technique #2: Verbal and Non-Verbal Communication: Verbal Communication: Key to Success – Think Before You Speak: Effective negotiators choose when to speak and when to not speak. When they speak, they choose their words carefully. And, yes, the night before the big meeting, they will sometimes even scribble out notes regarding the exact words they are planning on using. Great negotiators speak precisely, and that is no accident. Key to Success – Watch for “Verbal Leaks”: Most people are uncomfortable with blatant lying. However, as stated elsewhere in this presentation, deception has a role in negotiation. Sometimes, when a speaker is misleading his listeners, a truth will “leak out” in his comments. 1 Example: “I cannot offer you any more.” is a powerful statement. If the other side says this, there’s a greater chance we won’t be able to push for more of what we want. 3 Examples: “I don’t believe I can offer you any more.”; “I’m simply not able to offer you more right now.”; “That’s about as far as I can go.” say something more equivocal, less committed, less locked in. If voice the far carry other side says greater any weight of the than these things, words youwe’re choose. So, going to feel you must more learn to confident 1 control them.that we can push them to get more of what we want.  It’s All About COMMUNICATION… Technique #2: Verbal and Non-Verbal Communication: Non-Verbal Communication (continued): The Ability to Read Body Language and Tone of Voice is a powerful asset.: Remember that both sides are: (a) carefully guarding the value of their own BATNAs; and (b) trying to figure out what the BATNA of the other side is. If you can do a better job of hiding your BATNA, and estimating the other side’s BATNA, you will probably obtain a much better result. The ability to read the other side’s body language and tone of voice, and to control your own body language and tone of voice, is an enormously valuable tool. Example: Facial Expressions: Micro-expressions on the face can reveal a great deal (e.g., disdain, surprise, agreement). Knitted / raised eyebrows can mean skepticism, while a widening of the eyes can mean surprise. It’s fairly common for a negotiator to say one thing (“It’s so unfortunate that your last offer was so low, as we’ll probably not be able to do a deal.”) while their body language (the smallest trace of a smile) says the opposite. Example: Hands, Arms, Legs: Crossed arms can mean defensiveness. Wringing of the hands, tight grips on the arm rests, drumming on the table can all mean frustration or impatience.  Technique #3: RECOGNIZING TACTICS Technique #3: Tactics: Here, we review a variety of techniques commonly employed in negotiation. #1: The Players – Use of Representatives, Attorneys. Having the principal speaker / team leader on your side be an experienced negotiator or attorney can be an extremely valuable asset. The Right Temperament, Experience, Skill: Simply stated, not everyone has the temperament, experience, or skill to serve in the lead (speaker’s) role. “The principal speaker can often be the principal revealer”, and that can be extremely damaging to your position. A Healthy Independence: Imagine that your team includes 5 people: (a) Salesman Sam; Salesman (b) Sam Al; Accountant is too close toLarry; (c) Lawyer the One (d) of Engineer the other Ed;team and (e) members Supply who Chain is Manager emotionally deal. Sabrina. and financially Salesmaninvested Sam will notin earn as the adeal year-end should do bonus. worth 20% of his the talking salary if the deal “closes” (if a deal is signed) regardless of its terms; he will earn #2: The noPlayers bonus –if Representatives it does not. Lacking Authority. The other side’s negotiator A (Alan) advises that he “doesn’t have authority” to do a deal. Rather, he’s empowered to listen, then meet with his principal P (Peter) (the boss man with the authority), and then report back.  TACTICS: The Players Technique #3: Tactics (continued): #2: The Players – Representatives Lacking Authority (continued). Why is the other side having you talk to A if A doesn’t have the authority to negotiate (bargain / haggle / agree to terms / etc.)?: A couple of reasons. First, A will commonly try to get your team to make concessions to your offer / proposal before he reports to P. Second, if A does negotiate towards an agreement, you can be sure that even your “final” proposal will be considered by a P who makes additional demands. Auto dealerships do this all the time: first you negotiate with the salesman, and then you negotiate with the sales manager who sits in the back room. It’s as if you’re going through 2 rounds of negotiation (2 concessions in series) each time they go through 1 round (1 concession). to go That is, after making your initial offer / proposal, simply insist that Response: concessions slow. noThe of fastest any further way kind will beto endby made the practice your is by side until demonstrating after you receive aan initial willingness counter-offer P. fromtalk as much as he likes about how inadequate your offer is, In short, A can but ityour affect will not insistence on receiving an authorized counter-offer from P. If the other side should insist on their right to have both A and P negotiate, then your side must be careful to concede even less in each round of negotiation with A, so that concessions in that same you have additional room round for 1  TACTICS: The Players Technique #3: Tactics (continued): #2: The Players – Representatives Lacking Authority (continued). “Never Negotiate Against Yourself”: This is a frequently arising theme / key to success, and we’ll likely talk about it at least once more. You’ll notice that one reason the other side used A as a front-man in the negotiation was to see if they concessions could get youintoyour makelatest offer before the other side (P) has to Never additional against respond.. Make a single proposal, and do not edit it until after the other side negotiate yourself a counter-offer has made their latest round of containing. concessions #3: The Players – Negotiating in “Teams”. When large deals are negotiated, it’s common for each side in the negotiation to be represented by a team of people. This can be quite helpful, as each team member can contribute his / her unique expertise (in accounting, marketing, engineering, etc.) on the spot to the discussions, but having a larger number of team members “in the room” (on the negotiating team) does feature risks. Issue – Inadvertent Over-Disclosure: Experienced negotiators know that, when the other side asks questions, they must quickly decide: (a) WHETHER to answer; (b) WHO on the team should answer; and (c) HOW to answer (ideally, the speaker answering negotiators the question often volunteer as much far too truthfully and concisely information to theas possible,ofand then detriment 1 stopping the team.talking). Less-experienced  TACTICS: The Players Technique #3: Tactics (continued): #3: The Players – Negotiating in “Teams” (continued). Issue – “Mixed” Whenever Team A is able to get the team members on to publicly disagree with one Messages: another, Team B Team A usually enjoys an important. tactical On the advantage specific issue at hand, they can say “Our position is clearly reasonable. Even your own team member Sam agrees with us.” More generally, they’ve learned that Sam is the weak link on your team, the team member who they can most likely exploit in future tough discussions. Issuewho team – “Back-Channel” Communications: will earn a 20% bonus Recall if the deal He maythe example be so of Salesman motivated to close the that, Sam on closes.after the day’s meetings are over, he calls your dealone or more members of the other side(secretly) privately and discusses the issues on , their relative importance, and his plans to push your team forward towards agreement. the table own In a sense, he is working to help the other side to get to a deal they will be happy with, because he personally benefits even if the deal is less favorable as a whole to our side. Note: Sam’s actions CAN be a tactic employed by your side to gain advantage BUT ONLY IF Sam and your entire team have agreed to employ this tactic (and the precise communications Sam will employ) in advance. If Sam has initiated contact on his own – without interests, informing your team in advance – Sam is serving his own not the 1  TACTICS: The Players Technique #3: Tactics (continued): #3: The Players – Negotiating in “Teams” (continued). Solution – “We Speak with One Voice”: There really is only one solution to the issues described Everyone on your team (the lead negotiator, all relevant team company above. personnel) must all members, agree in advance that “WE SPEAK WITH ONE VOICE” during the with the other. We never disagree with one another in publicly negotiation tactic side (a deception) we’ve planned in a unless it’s advance. When we are called upon to answer a question, we first confer with the team leader about whether to answer the question, and, if the decision is to do so, we answer truthfully and concisely, and we stop talking. There are no “back-channel” communications whatsoever. To the contrary, the other side sees complete unison in messaging on matters of both content and tone. #4: The Plays: Use of Strong Opening Offers. The Strong Opening Offer – A Valuable Key to Success: In most western democracies, and particularly in North America, there is a VERY strong expectation that the parties will negotiate from strong opening positions to a changed final deal. That towards agreement is, EACH somewhere inside the willExperienced make strongnegotiators opening offers, acceptand they this, will eachtheir middle. prepare concede ground opening in steps, moving positions and slowly they and steadily 1 accordingly.  TACTICS: Making Big Plays Technique #3: Tactics (continued): #4: The Plays: Use of Strong Opening Offers (continued). Issue – The Non-Believers: There are many people who complain about this “expectation of negotiation”, and they make statements such as “Why can’t we all just deal honestly with one another?”, “Why can’t we all just open with our best- and-final offers and simplify things?”, “Why must we go through the charade that represent these many This viewpoint demonstrates back-and-forth a lack of understanding and acceptance of counter-offers the and ?” negotiation of nature human behavior in western. Such people should left democracies off of the negotiation. generally be team The Most Common Result Achieved by the Non-Believers: Non-believer Seller A opens with his “honest” final price. Buyer B opens with a strong low offer. A refuses to move on price. B believes A is dishonest (not acting in good faith) and terminates the deal. YOUR Response to the Non-Believers: If a non-believer must be on your team, then you must reinforce the following with them before any meetings: (a) there is nothing dishonest about issuing a strong opening offer, and having both sides concede in steps, if everyone expects that; (b) step-by-step concessions require multiple meetings which results in a greater step-by-step flow of information and communication, which usually reduces risk and produces (which theirbetter deals; bosses willand (c) stepwise concessions produce greater “buy-in” 2 (allowing members of both teams to feel that their teams have added value appreciate)).  TACTICS: Making Big Plays Technique #3: Tactics (continued): #4: The Plays: Use of Strong Opening Offers Lesson In western democracies (and particularly in North America), you should (continued). strongest : tender opening theoffer that you can reasonably. There are two benefits. First, studies defend show that strong opening offers do influence manythe final deal that is reached (to the advantage of the team issuing it). Second, strong opening offers have a psychological “anchoring” effect. That is, because they are the first thing heard by the other side, they cannot help but to be influenced by it as at least a partial indication of what the ultimate negotiated value of the deal should be. #5: The Plays: “Take it or Leave it” (TILI ) Boulwareism The This – is the “best-and-final Offers offer first” or “take Offersit or leave it”. Tactic: Your strategy opponent announces right away that there will be no negotiation. The offer being presented is non-negotiable. You can accept it or reject it, but it will not be modified in even the slightest terms. FYI: It is also known as “Boulwareism”, after the General Electric executive Lemuel Boulware who championed its use. 21  TACTICS: Making Big Plays Technique #3: Tactics (continued): #5: The Plays: Boulwareism – “Take it or Leave it” (TILI) Offers (ctd): When does it Make Sense?: There is really only ONE situation in which this strategy makes sense – the situation in which one party has absolutely positively ALL of the bargaining strength, and the other party has absolutely positively NONE of the bargaining strength. Example: You are a recent college graduate, working hard and successfully in your first job, but you really don’t have much money. You want to obtain a credit card from VISA. You really shouldn’t expect VISA to “negotiate” the terms of your credit card. You’ll likely have to look at the Credit Card Agreement and “take it or leave it”. However, the VAST majority of negotiations between businesses do NOT feature such lopsided positions. Most businesses in western democracies want to enter into more deals, with more suppliers, and more customers, and they are generally comfortable with the notion that some negotiation / adjustment of terms may be required to close a deal (even when they believe that they have most of the bargaining strength). How to Respond – Step #1: Try to Evaluate the Offer Objectively. This is the hardest part, because many view TILI Offers as insulting. However, we should never forget that, if an offer is a good one, we should accept it. If the offer is  TACTICS: Making Big Plays Technique #3: Tactics (continued): #5: The Plays: Boulwareism – “Take it or Leave it” (TILI) Offers to Respond Step : If you have Alternatives, Respond on the Merits How (ctd): –Offer (Ignoring the #2TILI to the. This is the risk that the other side takes make a TILI Offer – the risk that you’ll Restriction) ignore when the restriction. And that is exactly they what you should do. Do it without drawing attention to the fact that you’ve ignored the TILI restriction, as an emotional confrontation helps no one. Just respond with your counter-proposal. If you feel you must defend your response, focus first on the merits of your counter. If they persist in asking why you feel entitled to counter at all, you might gently allude to the fact that all parties have alternatives to agreement, and you do to. You don’t need to explain what your BATNA is (and, in fact, you almost never should), but, many times, when the other side is reminded that you may take your business elsewhere, all discussion of TILI simply goes away. #6: The Plays: “Concessions” Strategy: Concept – Yes, You Should PLAN Your Concessions. Negotiators expect to make a strong their way opening to a final offer, to agreement receive a strong somewhere in the counter, and They also for on plan both theparties to path they make toconcessions middle. take get on will there. 2  TACTICS: Making Big Plays Technique #3: Tactics (continued): #6: The Plays: “Concessions” Strategy (continued): The “Let’s Take Turns” (or “Batch”) Approach to Negotiating an Agreement: Meeting #1: Party A’s (Seller’s) team confers privately and prepares an initial Draft #1 of the Agreement. At a Meeting #1, Party A (Seller) walks Party B (Buyer) through Draft #1, allowing B to ask as many questions as they like (for understanding), and the meeting is adjourned. Party B’s team confers privately and prepares revised Draft #2. Meeting #2: At a Meeting #2, Party B walks Party A through Draft #2, calling attention to each change, allowing A to ask as many questions The as it Key likes Reason in pursuitThis Works - of understanding, When and the the parties meeting “take turns” is adjourned. Party A’s team latest confersdraft proposed Listening: privately and prepares (prepared a revised thenDraft by their presenting side), #3 which you usually the have it maximum effective communication presents at Meetingbecause, #3. And atso each on…meeting, one party is talking, and the other party listening is (and. learning) Advantages: (a) You can present an entire set (batch) of high-, medium-, and low- value revisions, and later “surrender” the low-value proposals while “holding firm” on the high-value ones. So, by yielding on several items, and incredibly holding firmreasonable to only a. few, (b) Ifyou done right, a feeling of joint look 2 ownership results.  TACTICS: Seller Making Big Plays Seller Communicat Considers es a Revision Buyer Communicat Buyer esa Considers Revision Technique #3: Tactics (continued): #6: The Plays: “Concessions” Strategy (continued): Remember – “Never Negotiate Against After you have made a not edit it until after the other side has made a counter-offer Yourself”: proposal, docontaining their latest round concessio of never make a concession alone. Rather, concessions always occur. You surrender ns in pairs. I and you surrender something in return. The best something, agreements occur without a rush, with each side taking a step-by-step approach to agreement across multiple rounds of negotiation. Remember, remember, remember – The Value of a Concession by You Lies in its Value to the Other Side (and NOT in its Value / Cost to You): how is This theandifferences example ofthat exist between the parties can be hugely A concession costs you a small amount of money could be HUGELY beneficial to the beneficial. that. Do NOT other or sayside anything to trivialize the. You might secure a BIG concessiondo concession from the other side (that gives you enormous value), because they highly valued a particular concession from you (even though your concession imposed a negligible cost on you!).  TACTICS: A Game of Inches Technique #3: Tactics (continued): #7: Know Thyself – Manage Thy Stress. Many negotiators believe that you can predict the outcome of a negotiation based on which side wants the deal more. That is, if Team A wants the deal more, it will get the short (worse) end of the stick (deal). Experienced negotiators do everything they can to ensure that they are in the right frame of mind from their very first contact with the other side. If they’re working as a part of a team, they are particularly concerned about WHO will be doing most of the talking on behalf of our team. It is CRITICAL that that individual not appear too eager. Whenever we negotiate, it is always possible that the other side will react negatively to our last proposal, terminate the negotiations, and we’ll be left with no deal. However, experienced negotiators know that that is the exception, not the rule. They know that the other side too wants a deal. They expect some “push and pull”. And they expect to “wheel and deal” a little and to get a better #8: Thedeal. And they Process: usually “Keep ‘emdo. Talking” = “Keep THEM Experienced do everything that they can to maximize contact with the other Talking”. side, and they do negotiators everything they can to keep the other side. The more the other side talks, the more you The more you learn, the better you negotiate. talking learn. Similarly, experienced negotiators do everything they can to limit disclosures on their own sides (and to limit the amount of talking teams do!). Take their own 2 heed.  TACTICS: A Game of Inches Technique #3: Tactics (continued): #9: The Process: Never Relax Until the Deal is Signed. Situation #1: Yahoo! – the last “big” issue in the negotiation appears to have been solved. You can feel it, and so can everyone else on both sides of the table. We’re going to do the deal. It feels great, because we can all relax a bit. There’s no way this will fall apart now. Just a few more small strokes, and we’re done. You begin checking your cell phone text messages. Checking your cell phone (and losing concentration on the deal) is a huge mistake. Situation #2: The negotiation is done, and even the contract is finished except for the tiniest of final provisions (“dotting the i’s and crossing the t’s”). Then, you get a call from the other side. They noticed a tiny irregularity in the deal. It appears to be a small timing matter, or approval matter, and they ask if you’d be OK with a quick final change to the deal, so that the parties can sign the contract 2 hours from now as planned. You feel a moment’s panic at the thought of “re- opening” everything when the deal is supposedly done, and you quickly agree. Quickly making even the smallest concession – with no similar concession by the The Midnight other It’s amazing how often enormous value is moved to the Hour: one side side – is inathe also final huge benefit hours (often mistake. of the final minutes!) before final agreement. and signingthe deal isn’t done until it’s DONE = SIGNED. Remember: 2  TACTICS: A Game of Inches Technique #3: Tactics (continued): #9: The Process: Never Relax Until the Deal is Signed (continued). Remember: the deal isn’t done until it’s DONE = SIGNED. Situation #1 – Don’t Lose Focus: Everyone else is relaxing their grip, checking their cell phone If YOUR side is attentive and careful, you could end up securing HUGE s. your sidevalue in the forfinal moments of the. Situation negotiation#2 – They’re in the Same Boat: It’s important to remember that the other side is in the same boat – they don’t want to “re-open” the entire deal in the last 2 hours before signing either. There is no reason to feel as if your side is the one holding things up – both sides apparently overlooked something. Situation #2 – Once Again, We Always Mutually Concede: Let’s say that the other side has proposed a quick and easy fix. If your side could agree to a concession about the date, or quality, or whatever, then everything is now fixed and ready to sign. You tell them you’ll call right back. You quickly confer with your team about: (a) whether you can make the concession; and (b) what you should ask for in the way of a concession Furthermore, from the other them in return. Youside callisback reminded that, with the no matter proposal, the what otherthe circumstances, side accepts, both and sides will always the make signing is concessions on.. This will be a valuable precedent that will together to discourage potential gamesmanship likely in help the 2 future.