Presented at Chesapeake September 26, 2012

1. Tune Up Your Negotiation Skills
Tactics and Strategies
Andrew L. Urich, J.D.
Puterbaugh Professor of
Ethics & Legal Studies
Spears School of Business
Oklahoma State University
405.744.8619
aurich@okstate.edu
www.andrewurich.com

2. Making a Connection
The World’s Greatest Car Salesman
• We like, trust, and believe people who like us.

3. Making a Connection
Overcoming Fear
Nikita Khrushchev
My Sales Philosophy
“When you are skinning your customers,
you should leave some skin on,
to grow again
so you can skin them again.”

4. Making a Connection
Showing Respect & Building Trust
• “My child choked on a chicken bone”
• Can you “get off on the right foot?”
• What telemarketers don’t want us to know
• If they are defensive you may be offensive.
• Winston Churchill’s thoughts on the subject

5. Showing Respect

6. Showing Respect

7. Making a Connection
Small Software Co. vs. Massive
Industrial Powerhouse, Inc.
“This product is provided subject to an
evaluation condition. In the event that the
software is deemed unacceptable by the
buyer for any reason, at the sole discretion
of the buyer, the buyer shall incur no
obligation to make the final payment as
described in the above payment schedule.”

8. Making a Connection
Concept Summary:
1. ABC….Always Be Charming.
2. Show respect and build trust.
3. “They” are not trying to skin you.
4. The relationship is the most important
thing.

9. Program Introduction & Goals
What We Need To Know
1. What is the essence of negotiation?
(Not what everyone seems to think)
2. Which negotiation variable has the highest
correlation with “winning” negotiations?
3. How do I plan for a negotiation?
4. How do I know when to be satisfied with my
negotiation outcome?

10. Program Introduction & Goals
What We Need To Know
5. How do costs and values impact
negotiations?
6. How can I adopt a win/win (more/more)
focus without becoming Pollyanna?
7. Appreciate the vital importance of “no.”
8. How can I increase my bargaining power?

11. Program Introduction & Goals
Leverage Through Negotiation
Sales 100
Status Quo Cost of
Goods 90
Profit 10

12. Program Introduction & Goals
Leverage Through Negotiation
Sales 105
Concerted
Cost of
Efforts on Goods 85
Negotiation
Profit 20

13. Exercise
Negotiation of a Movie Contract
On a scale of 1 to 10 please note your
satisfaction level when you finish
1 = dissatisfied 10 = extremely happy
1 5 10
dissatisfied extremely
happy

14. Change Your “Mental Model” of Negotiation
Have you ever heard anyone say this?
“Negotiation is an inefficient waste
of time. Can’t we quit messing
around and get to the bottom
line?”
•Saturn
•Winner’s curse
•The box or the curtain

15. Change Your “Mental Model” of Negotiation
Change Your “Mental Model”
• Completely new focus: It's the experience,
not the terms, that will provide satisfaction
to the other party.
• Don't look at negotiation as a necessary
evil.
A) It's an opportunity to discover their
bottom line.
B) And an opportunity to demonstrate
the FAIRNESS of your position.

16. Change Your “Mental Model” of Negotiation
Which provides more satisfaction?
A) a bad deal mistakenly considered to be
a good deal.
B) a good deal mistakenly considered to be
a bad deal.

17. Program Introduction & Goals
What Does it Mean to “Win?”
The Bargaining Area
$200,000 $215,000 $235,000 $250,000
Buyer
Seller
Bargaining
Area

18. What matters most?
Which of these factors are most highly correlated
with successful negotiation outcomes?
• Bargaining power
• Aspiration level
• Skill of the negotiator

19. High Aspirations
Research on Aspiration Level
• High aspirants beat low aspirants without
regard to skill or power.
• Skilled negotiators without power lowered
their aspirations.

20. High Aspirations
Power of High Aspirations
• Reciprocity and Anchoring
• Boy Scout circus
• Giant teddy bear
• Barbeque restaurant
• Analysis that does not improve decision making
tends to be a waste
• Wife’s shoes
• Selling up harder than selling down
• Pick your clothes dryer
• You will not exceed your aspiration.
• First offer makes a huge impact.
• Who should make the first offer?

21. High Aspirations
Factors Restraining High Aspirations
• Fear of offending
• Time constraints
• Fear of failure: A culture averse to failure
stifles exploration, experimentation and
discovery
• It’s more work

22. Analyze Your Level of Satisfaction
How Do You Know When to be Satisfied?
• Are your criteria arbitrary?
• Remember, you never get to see the bargaining
area.
• Our satisfaction level is based on…..
1. Our expectation
2. How we were treated during the negotiation
• Are you impacted by how far you moved from
their starting point?
• Are you impacted by their pain?

23. Analyze Your Level of Satisfaction
How Do You Know When to be Satisfied?
• Inaccurate measurement can create a false
sense of confidence.
• Ideal Measures & Benchmarking
• Energy consumption should be measured
against some ideal – not a budget.
• Southwest Airlines studied NASCAR pit crews
to speed up turnarounds – not other airlines.

24. Mental Model & Satisfaction Level
Concept Summary:
1. Raise your aspirations.
2. It’s not the terms that make them happy–
it’s the negotiation experience.
3. Avoid the winner’s curse.
4. When they see the fairness they say “yes.”
5. Being satisfied is a trap

25. Adopt a Value Focus
All Values Are Subjective
• Values differ between all customers/clients.
• Nothing has inherent value.
• PEOPLE value things.
• Value will vary from person to person.

26. Adopt a Value Focus
Bases of Subjective Value
• Specific situation
• Time
• Uses for the product
• Personal preference
• Alternatives

27. Adopt a Value Focus
Bargaining Area Redefined by MBM®
PRICE
COST VALUE

28. Exercise
…..No Talking Please!
• $10,000 has been designated for you to
share with another department head.
• Person A writes a number on a piece of
paper and passes it to Person B.
• Person B writes “Yes” or “No” and passes it
back.

29. Win/win
Show Respect & Build Trust Win/Win Attitude
• Ka-shing

30. Win/win
Make the Pie Bigger
Instead of Arguing About How to Slice It
• Win/win is an attitude. (Fixed Pie Fallacy)
• 62% buy into the fixed pie fallacy.
• Pay close attention to their concerns.
• Increase their “value.” Make it easier for
them to buy from you.
• Reduce their opportunity cost (because if they deal
with you they aren’t dealing with someone else)
• Use creativity, diligence and enthusiasm to
identify new options – Stephen Covey’s
“Third Alternative.”

31. Win/Win
Listen First
• Are you projecting?--Listen for something
unexpected.
• “They” know everything you want to know.
• Listen for opportunities to make the pie bigger?
• Identify their problems before you sell a solution.
• Take notes.
• Listen twice as much as speaking.

32. Win/win
Concept Summary:
1. Win/win is an attitude.
2. Listen!!
3. The goal is to increase the value for both
sides of the transaction.
4. Cooperation is better than competition.

33. The Power of “No”
“NO” Induces Trauma
• Develop a positive “NO.”
• Being ready, willing, and able to say “no”
gives you power.
• Knowing when to say “no” gives you power.
• Setting Priorities: Risk-adjusted present value
of opportunities relative to resources consumed
(such as scarce talent or capital)

34. The Power of “No”
Rigorously Explore All Alternatives
• Harvard’s Methodology: Have you identified
your BATNA (Best Alternative to Negotiated
Agreement)?
• Have you fully explored and analyzed your
BATNA?
• Confidence soars
• Identify alternatives so you will feel able
to say “no.”

35. The Power of “No”
A lot of problems are caused by people who say
“yes” when they should say “no.”
• Southwest Airlines: The King of “No!”
• No food
• No choice of planes
• No assigned seats
• No extra baggage
• No first class
• No shared reservation system
• No expensive equipment
• Why we need a Sales Manager
• Failure to say “no” leads to disaster

36. The Power of “No”
Purchasing Manager’s Favorite Trick
• How to say “no” when “they” tell you your
competitor will say “yes.”
● “They” are testing you
● Your competitor is over promising
● You will lose focus
● With a good relationship, “they” will get over it

37. The Power of “No”
Concept Summary
1. “No” is the key to success.
2. Practice your “no!”
3. Slow down
1. Hmmmm….
4. Focus on the relationship not the terms.
1. Manage emotions
2. Show respect
5. Manage their response to your “no.”
1. Fear
2. Guilt
6. You don’t want to win them all.

38. Evaluating and Building Bargaining Power
Understanding Bargaining Power
• Don’t underestimate your power.
• Don’t dwell on your weaknesses.
• The illusion of power
• The power of competition
• The power of legitimacy

39. Landlord - Tenant Exercise

40. Landlord - Tenant Exercise
Exercise Summary
• Win/Win Paving and Utilities
• Who made the first offer? High Aspirations?
• You both wanted the same thing
• Listening advantage
• Satisfaction trap
• Anyone leave pie in the plate?
• Fairness? Trouble saying no?
• Any lapses in trust?

41. Conclusion and Summary
The Most Important Things to Remember
1. The most important thing—make a connection
It’s not about terms—they want a fair deal.
2. The other most important thing—
high aspirations.
3. Your satisfaction criteria are arbitrary?
4. You are trading values—cost is irrelevant.

42. Conclusion and Summary
The Ten Most Important Things to Remember
5. Listen first.
6. Look for Win/Win opportunities.
7. You always have more power than you think
you do. 20% of the power is missing.
8. Who’s skinning who?

43. Thank You
I appreciate your time and attention.
Please keep in touch.
Andrew Urich
405.744.8619
www.andrewurich.com
aurich@okstate.edu

44. References
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• Bazerman, Max H. Smart Money Decisions, Wiley & Sons, 1999
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• Cohen, Herb. You Can Negotiate Anything. Secaucus, N.J.: Lyle Stuart, 1980
• Covey, Stephen R. The 7 Habits of Highly Effective People. New York: Simon &
Schuster, 1989.
• Dayton, Doug. Selling Microsoft. Holbrook, MA., Adams Media Corporation, 1997.
• Fisher, Roger and William Ury. Getting to Yes. New York: Viking Penguin, Inc.,
1981.
• Forsyth, Patrick. The Negotiator's Pocketbook. London: Alresford Press Ltd., 1993.
• Johnson, Spencer. The One Minute Sales Person. William Morrow, N.Y, 1984.
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• Koch, Charles G., The Science of Success, Wiley & Sons, 2007.
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• Lewicki, Roy J., et. Al. Essential of Negotiation, 4th Ed. McGraw Hill, 2007
• Nierenberg, Gerald 1. The Art of Negotiating. New York: Barnes & Noble, 1995.
• Paul, Richard. Critical Thinking. Santa Rosa, CA: Foundation for Critical Thinking,
1993.
• Schoonmaker, Alan N. Negotiate to Win: Gaining the Psychological Edge.
Englewood Cliffs, N.J.: Prentice Hall, 1989.