Negotiation Tactics


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Business negotiations - Part 3: How to control the negotiations. Open questions and phrases. Negotiation tactics.

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Negotiation Tactics

  1. 1. Business Negotiations part 3 Osvaldas Čiukšys
  2. 2. How to control negotiations1. Controlling the environment (discussed earlier): arrangements, drafts, seating2. Setting the agenda (discussed earlier): imposing agenda that you prefer3. Controlling the course of negotiation: using questions and expressing emotions © Business Negotiations, Osvaldas Čiukšys
  3. 3. Types of questions in negotiations1. Open questions: designed to get more information and require explicit answers2. Probing questions: more specific sort of open questions which require detailed explanation3. Closed questions: requires short answers of “yes” or “no” type © Business Negotiations, Osvaldas Čiukšys
  4. 4. Open questions and phrases (1)Most important and effective tool to control negotiation (theirsubject and time frame) are open questions (or phrases): “What do you think about the possibility to change your delivery terms ?” “Can you change your delivery terms?” © Business Negotiations, Osvaldas Čiukšys
  5. 5. Open questions and phrases (2)Examples:• What do you think about our proposal?• Please tell us more about the strong sides of your proposed paymentterms• Could you elaborate a bit more on the delivery terms?• Would you be so kind to explain your idea about the solution to thisproblem?• Correct me if I’m wrong• The most important thing for me that everything is done correctly andfairly• We would like to settle it in accordance with best common practice andexperience• Can I ask a few questions to see if my understanding and information arecorrect? © Business Negotiations, Osvaldas Čiukšys
  6. 6. Open questions and phrases (3)“Let the doors stay open” examples:• Let us say that we agree with that proposal, what would be your suggested way to proceed?• Is there any other information you feel I should have at this time?• Whys is that so important to you?• Let me get back to you on this later• Please help me understand the purpose of your request/offer © Business Negotiations, Osvaldas Čiukšys
  7. 7. Probing questions• When you say “approximately”, what do you mean by that?• What else would that entail?• How specifically would that work?• If we meet your requirements what exactly would be your offer to us?• If speaking more specifically, what do you mean by saying…?• You said that your offer is… It seems that your current positions is… © Business Negotiations, Osvaldas Čiukšys
  8. 8. Closed questions• Do you agree?• Are you saying we could by-pass that?• Is that always the case?• Am I correct?• Do you want me to close the issue?• Are you happy with this?• Should we proceed further? © Business Negotiations, Osvaldas Čiukšys
  9. 9. Expressing and sharing emotions (1)Speak about your emotions during negotiation process.Use it to create constructive and controllableenvironmentExamples:• We had a good start. That makes me optimistic!• We are doing not very well this time. Are your of the sameopinion? What are the reasons your think?• I feel exhausted by this issue. Should we change for somethingbetter?• I am so happy we agreed on this. It makes me think we willmove easier now. Don’t you think so?• Should we break for a coffee? I think we deserved it both! Letsdiscuss it informally… © Business Negotiations, Osvaldas Čiukšys
  10. 10. Expressing and sharing emotions (2)React immediately to what is unacceptable or undesirable foryou: take the control backExamples:• Sorry to interrupt you, but I can’t understand the reasoning behind it• I feel uncomfortable: I can’t see enough logic behind thesearguments• I am an open person and I should tell you my opinion about what Ijust heard• This made us a bit nervous. Could we go back and look to thesituation from a different perspective• It makes me feel bad if we can’t agree on it. Let us try to focus on itlater and finish our agenda © Business Negotiations, Osvaldas Čiukšys
  11. 11. Controlling the course of negotiation Right questions help you control the overall situation of negotiation Quick reaction and responsiveness enables you to take over the control of situation © Business Negotiations, Osvaldas Čiukšys
  12. 12. Negotiation tacticsNegotiation tactics are purposely used or preliminaryplanned behavior, directed to achieve the main goalsof negotiations. They are directed to: Reinforce negotiating power Gain some initial supremacy in negotiation Collect not disclosable information Make the other side emotionally disbalanced Take control over the negotiation process © Business Negotiations, Osvaldas Čiukšys
  13. 13. Main negotiation tactics usedI. To check the opponent resistance point / reservation price/ maximum priceII. AggressiveIII. To gain positional advantageIV. To gain quantitative advantage (not equal exchange)V. To disbalance opponents emotionally There are separate group of tactics, so called DIRTY or UNFAIR tactics often used in negotiations as well © Business Negotiations, Osvaldas Čiukšys
  14. 14. Main negotiation tactics (1)I. To check the opponent resistance point /reservationprice/ maximum price:1. Small stepsBy adding a small improvements (step by step) to the first offer you arereaching the maximum price of the other side they are willing to pay2. Best offer for the budget you haveOffer to disclose your budget/ maximum price: “How much you canspend? We have the most suitable offer for you”3. Extreme position (Low ball/High ball)Initial offer received is done in the manner and under conditions to beunacceptable for the other side in order to provoke disclosure of theother side real intentions (resistance point) © Business Negotiations, Osvaldas Čiukšys
  15. 15. Main negotiation tactics (2)II. Aggressive1. First and Final offer (Ultimatum)Requirement to accept the first offer (or second) otherwise negotiationswill be stopped2. Threat of terminationRequirement to accept offer or conditions under threatening to terminatenegotiations3. “Best” offer (Take it or leave it)Explicit pressure not to enter into negotiations. Statement that the bestoffer is done and there is nothing more to add to it.4. Attacks Attacking you personally or attacking your company or your country .“Tell me, why I usually enter into some problems when we have a meeting orI’m coming to your country?” © Business Negotiations, Osvaldas Čiukšys
  16. 16. Main negotiation tactics (3)III. To gain positional advantage (1)1. Hand over (“Hot potato”)To handover your problem to the other side. “I have the amount Abut would like to have the thing B. Tell me, what I have to do?”2. Misleading (Snow ball)Concentration on some not really important issues, overloading theopponents with too much information3. Wrong targetOver evaluation of an argument or issue done on purpose to gain concessionin return. Not important concession is traded-off after hard bargaining4. Higher authorityAgreed issues or received offers have to be approved by the higher managementoffer is done and there is nothing more to add to it. © Business Negotiations, Osvaldas Čiukšys
  17. 17. Main negotiation tactics (4)III. To gain positional advantage (2)5. Good cop/ Bad copDeal with more sympathetic opponent while the other is absent orexcluded from negotiations6. ReluctanceShowing to the opponents that you are not interested or indifferentto negotiated subject7. The SqueezeTelling the other side that he or she has to do better in order to make the other side to give concessions without getting something back. “Seems tobe that you are not eager to work on it. We’ve done a number ofconcessions and waiting for your adequate move” © Business Negotiations, Osvaldas Čiukšys
  18. 18. Main negotiation tactics (5)IV. To gain quantitative advantage (not equal exchange):1. Split the differenceThe split difference between initial proposals “has to be approved” by oneside’s higher authority . You set and split the lower difference again2. Demand for reciprocityRequirement to reciprocate by giving a concession or offer to notimportant concessions made or offer given by the requesting side3. Additional requirementsNot important requirements and arguments are exchanged for animportant concessions. “If you can ‘t deliver the goods in 2 weeks than weneed additional discount of 2% to cover our stock management costs”4. NarrowingStarting from easy to agree issues and narrowing the disagreement to themost important one. “If we did all these, can’t we agree on this one?” © Business Negotiations, Osvaldas Čiukšys
  19. 19. Main negotiation tactics (6)V. To disbalance opponents emotionally1. Lost concentration (“Bus station”)Permanently changing the environment trough the course of negotiations:changing negotiating team members, inviting numerous experts, changing meeting places/rooms, stopping – starting negotiations because of different“technical” reasons etc.2. OverreactionNot adequate emotional reaction to offers, concessions or arguments ofopponents. “ You have to imagine me saying it to my boss. How I shouldexplain such your offer to him?”3. ClarificationPermanently asking for clarification or additional substantiation ofposition/argument/offer in order to minimize opponent explanatory powerand increase the chance of his mistakes © Business Negotiations, Osvaldas Čiukšys
  20. 20. Main negotiation tactics (7)V. To disbalance opponents emotionally4. Bad conditionsDisadvantageous seating arrangements (uncomfortable chairs, opposite thewindows etc.), very early/late meetings, noisy/disturbing environment etc.5. Changing the agendaSkipping some issues, jumping back and forth through agenda of the meeting, including not agreed points to the agenda6. OverloadOverloading the other side with unnecessary, not important information,(statistics, reports, presentations, site visits etc.) or hide piece of importantinformation in disproportional amount of non important one . Send informationon Friday afternoon requiring an answer on Monday morning etc. © Business Negotiations, Osvaldas Čiukšys
  21. 21. Unfair or ‘’dirty’’ tactics in negotiations (1)Misleading/lying :1. Wrong information/ facts:“This car belonged to an old lady who kept it all the time in her garage. It’s almostbran new...’’2. Limited authority:“Last time we agreed on the issue but our boss does not want to give in on this question..’’3. Too easy to be true:Your opponents taking the obligations too easy (they even do not plan to fulfill theirduties ) and require a real concessions from you in return 21 © Business Negotiations, Osvaldas Čiukšys
  22. 22. Unfair or ‘’dirty’’ tactics in negotiations (2)Psychological pressure:1. Stress full environment:Uncomfortable chairs, small and noisy room, too dark or blinded by the light etc.2. Personal attacks, embarrassment, remarks:Remarks : ‘’please speak louder, we can’t catch a thing…’’, ‘’your documentssubmitted were a mess..’’, ‘’ information was outdated and unprofessionally prepared.’’ ‘’bad hotel reserved…’’ etc’. ,3. Threatening:‘’ We tell about it to your boss, shareholders, clients, journalists’’,‘’ We will go to your competitors, main rivals etc.’’4. Corruption:Usually the weakest member of your team, who has some‘’history’’ or relations with your opponents, receives“an interesting offer ‘’ 22 © Business Negotiations, Osvaldas Čiukšys
  23. 23. Unfair or ‘’dirty’’ tactics in negotiations (3)Positional pressure:1. Refusal to negotiate:For subjective reasons, like not met dates for drafts or samples submission etc., your opponents are refusing to start negotiations2. ‘’Spiraling’’ – the same requirements again“Sorry, we agreed last time, but we can’t accept it in full. This time because of...’’3. Playing with time:“Only when you meet these conditions, we are able togo further..’’4. Unreal demands:Opponent’s position is based on the terms you objectively can’t meet:‘’If you can not do it in red color, we sent you the sample,We can not pay this price..’’. You required to make more concessionsbecause you are ‘’failing to meet the agreed contract terms ‘’ 23 © Business Negotiations, Osvaldas Čiukšys
  24. 24. 4 Ways to Defend1. Ignore them Ignore the pressure, don’t play according to their ‘’rude’’ tactics2. Acknowledgement In a friendly manner, without any signs of anger inform your opponents that you understand their applied tactics3. Request to stop Make a firm and short statement asking opponents to stop their tactics. Explain that it is counter productive and they will be responsible for the failure of the negotiations and future of the mutual business relations4. Termination of the negotiations The most extreme way if others are used. In a calm manner inform the opponents that due to their destructive behaviour and attitude you terminate the meeting. Stay constructive and short, reconfirming that what’s happening is their fault 24 © Business Negotiations, Osvaldas Čiukšys
  25. 25. Questions?