|Neutralising Manipulative Negotiation Tactics|
|We analyse manipulative and non-manipulative negotiation tactics and their vital counters. Prerequisite for every serious business deal maker.|
Prior to the 1980's, many companies focussed their negotiation training on tactics. Although the following tactics often yield a short term result, we strongly recommend that you consider whether each tactic fits your intentions for your business relationships. The reason we urge you to carefully consider their use is due to both the long term damage they can deliver to your business relationships, and the questionable ethics of using manipulative tactics. Once you have mastered our Value Creation Framework in your negotiations, the need for manoeuvring to gain a small short term advantage will lessen. Many of these tactics are designed to extract value out of the other side without making any value contribution or creation. Many are thus Win-Lose by nature.
Regrettably you will all too often have to negotiate with others who employ these tactics against you. It is therefore important to notice them, and have the knowledge and negotiation skills to neutralise their effect with suitable counters.
The counters you will find here have one thing in common. They separate the tactic from the person. So whilst you are acting and sometimes judging the tactics employed, at no time do we recommend you blame the person or attach the tactic to the person's identity. We are not our tactics. Using these tactics doesn't make a negotiator a manipulator. So there needs to be a clear distinction drawn between a negotiator using manipulative tactics, versus a negotiator being manipulative because they are using these tactics. Often a negotiator will either be acting out of habit without giving thought to their actions. Other times what we perceive as a tactic, may in fact be something entirely different.
You wouldn't dare use one of these tactics on a friend or family member would you? Perhaps your best insurance policy against these tactics is to invest time in befriending your counterparty before the negotiations proper begin. Rapport skills used in a neutral social setting pay large dividends later at the negotiation table.
There are very many tactics and ploys in negotiation. We cover the main areas you will encounter and suggest the most effective counters we have found.
This is a highly contentious area that poses the question: How can you know whether the other party is being totally honest when disclosing their negotiation interests? Might they be 'loading the dice' in their favour through adding extra false interests into their agenda? So you hear about 13 interests, when in truth they only have 10?
Two examples of how this can create a win-lose in their favour: First danger is of your making an exchange on an invalid interest of theirs, only later to have them drop this exchange from the deal - leaving you with an unmet interest of yours, and them with a deal that satisfies all of their interests. Second danger is for the other party to agree to 'forget' about their fictitious interests if you will forget about your real interests.
There are various methods of handling this dishonest tactic. Your being thorough may be sufficient. So remember to get to their motivation for each interest by asking how each interest helps them. Then work together in ranking their interests. If you feel suspicious, trust your hunches and probe further, research more widely and withdraw to regroup.
Your best method of safeguarding yourself stems from a combination of preparing thoroughly to predict and then understand what they should and will be asking for. Check their expressed interests against your expectations. Then develop your interpersonal perceptions to notice when the other party is being economical with the truth. There are always signs you are strongly advised to hone your senses. We recommend your training and gaining practice in the following areas: NLP, Body Language, Behavioural Psychology and Linguistics.
If you are the buyer, you will hear the seller ask for a lot more than you expected. If you are the seller, the buyer will offer you far less than you expected. The intention is to lower your expectations and thereby gain a concession without having to make one in return. The risk is that you will be offended and enraged, refusing to have any further dealings with the other party.
It's important to note that the other party's culture may dictate this tactic as standard practice. A German or American trading in China will grow accustomed to extreme proposals. If the culture in which you must operate dictates extreme opening offers, then you are recommended to blend in and take advice on how to play by local rules.
To generalise then: in western countries, separate the person from their behaviour or tactic. If you are surprised, show your surprise and allow yourself to laugh. This can diffuse the situation and facilitate a deal. We don't generally recommend an extreme counter proposal. Let the other side know that their expectations need to be adjusted, and use other deals as precedents to persuade them by how much.
The Negotiation Nibble
Just when you think you are fully agreed and about to sign the contract, they ask "Transportation and insurance is included, isn't it?" There is a strong urge to make this final concession for the sake of signing the deal. This urge must be resisted. The Trading principle of using an If-Then should be used: "In contracts where we pay for transportation and insurance, we add an extra 3% to the price. So yes, if you are willing to pay the extra 3%, then we will cover these two items."
We usually recommend you enquire as to the interest behind this newly raised request. If it was omitted earlier by mistake, then perhaps there is an opportunity to meet this need in another creative way that meets both parties' needs. A great way to prevent nibbling and other unpleasant surprises is through being explicit and thorough in specifying exactly what is included and excluded in the deal.
Buyers can model their perfect deal through shopping around and getting many bids before coming to you. They may come to you with a proposal that fully satisfies their interests on price and discount structures, quality, service, time-scales etc. Often they may tell you that "this is what the competition is offering us, so you'll need to at least match it!" In reality they would have "cherry picked" the most desirable offerings from each of your competition's proposals.
By asking who exactly you are being played off against, you are better able to satisfy your own interests. Enquire into who they were offered this dream deal by, and whether this company indeed did offer them an identical deal to the one you have to beat. If it seems too good to be true you may be right! Take time out to do your market research and examine the named competitors standard conditions and current deals. If at all possible, talk with your competition.
Draw the other sides' attention to the principle of trading and mutual concession making. Explain that in order to make the deal worthwhile you will need to gain something in return for varying your offer in favour of their cherry picked deal. Perhaps you will be the one with the challenging task of bringing this buyer's expectations back down to earth, and perhaps you will win the deal in so doing.
Physical reactions such as sudden gasping for air and visible expressions of surprise and shock are common examples of flinching. What makes the flinch so dangerous is that it happens in an instant, and most are not aware of it at a conscious level. Seeing a shocked expression is far more believable as compared with hearing someone saying "I'm shocked." To effectively combat you first need to notice what is happening consciously. Then think about whether they genuinely expected something else, or if they are merely playing a part to lower your expectations. Like most other tactics, if you have noticed the tactic, you are unlikely to be influenced by it and therefore most of the way there in dealing with it.
Since a flinch is essentially a disappointment on their side, take the time to ask "I notice you looked surprised, what were you expecting?" This puts you in a position to talk about their unrealistic expectation, rather than your unrealistic terms.
Good Cop - Bad Cop
No matter how often we see these antics in old and new movies alike, many negotiators often don't see when these scenarios are being played out in front of their very eyes. You will be faced with two or more negotiators, one is demanding concessions whilst the other is (by comparison!) more reasonable. Often the bad cop doesn't have to be present at all. The other party will make references to their boss or other team members' demands for your concessions.
Most important is for you to notice what is happening, and remember that despite appearances, the 'good cop' is not on your side. Often the dynamics can be changed by your calling them on their behaviour by saying "You know what this reminds me of? A police interrogation scene from an old movie with that old good cop / bad cop routine. Now I know you guys wouldn't intentionally be doing that routine on me, so let's get back to the reason why came together today."
Alternatively you could focus all your efforts on the bad cop, and ignore the good cop. Since it is the bad cop you have to satisfy, it should be her/his interests that need to be fully discovered.
Mandated Authority comes in two main forms:
- The other party can only negotiate on certain items, whilst others remained fixed by a higher authority. Sometimes called 'Limited Authority'.
- Final approval can only be given by a higher authority.
First ask the other party how their company will make the final decision to buy. You may need to probe further to uncover the other decision makers and line of authority. Failure to enquire fully at this stage may mean that negotiation time and energy have been wasted by the higher authority's torpedo "No".
You don't necessarily need to start negotiations with the decision maker. It is useful to create a relationship with the lower level authority person with whom you are negotiating, as they exert a great deal of influence in your favour. Having established that you do need to talk with a higher level authority, make clear that you will need to talk with at some stage.
When faced with off the table items mentioned in 1 above, don't accept these at face value. If you do, the list will grow and you will have gained nothing in exchange for these concessions. Enquire as to the interests that lie behind these items being non-negotiable.
Having a mandated authority from whom to gain final approval is most useful in circumstances of high risk and in new and unfamiliar markets.
The law of supply and demand comes to us in many guises. Similar to 'Cherry Picking' you may hear that your competitor offered the same deal for a lower price. You may be told that unless you meet their price the contract will have to go out for bids. More subtle may be allusions in passing to conversation or products of your competitors. Perhaps you will notice a competitor's product catalogue on their desk with post-it notes sticking out from several pages.
Often you will be faced with a generalisation of "Everyone else is providing this service as standard". Of course you will want to challenge this generalisation immediately, lest it sticks and they start believing their own claim. Ask who exactly they have spoken with, and then proceed to compare your offering to the other party in detail. Don't take their word for it; make your own enquiries if you don't already know what your competition is offering.
First establish exactly how comparable your competitors' offering really is. Quality, volume, service, delivery, time-scales and payment terms need to match to make for a meaningful price comparison. Very rarely will your offering be totally undifferentiated from the competition. Ideally your due diligence preparation would have armed you with information on your competitors value proposition. Work to differentiate your offering so as not to be commoditised and beaten down on price.
Deadlines force parties into movement through making choices. Deadlines may be caused by circumstance (return flight departure time approaching), or have a real consequence (project grinds to a halt without a person or a product), or they may merely be a tactic to force your hand and deprive you of adequate preparation time.
Ask for consequences - "What will happen if we don't meet your deadline?" Perhaps through working together you can open their eyes to options that ease the pressure from the seemingly unmovable deadline.
Limits range from money, to time (deadlines as mentioned above), to capacity, to personnel and more. The most feared to a sales person is limited money. "We love you, your product and organisation - we just can't afford to pay more than X."
Perhaps you can deliver within their stated limit, ensure that you apply the trading principle and get something back for making this concession. "If I sell at X, then you will need to forgo your after sales support and reduce warranty to 1 year."
We advocate using advanced 'sleight of mouth' techniques to refocus the conversation onto creating value, rather than the idea of a fixed pie. Experience has taught us that when the risk of losing a valuable product or service is fully understood, then the limiting restrictions are brought into proper perspective. "Yes we do need to work to your budget. Let's also remember that we are talking about saving your company 2000 hours per year here, worth which is worth X2 discounted over 10 years. So the real cost isn't X, it's the risk of not saving X2."
Take it or Leave it
This tactics is confrontational and sometimes even hostile. Focus on the interest behind the demands or negotiation position, and then work together with the other party to create options that allow the interest to be met in another way.
"The workers won't accept less than a 2% increase in salary, take it or leave it!" can be met with "I understand the workers need 2% more in salary, so please help me to understand what they will be doing with 2% more?" It may be that this money would go towards their retirement plans. If so, the company could offer to increase the pension contributions to meet the desired security levels. Until you know why they want a 2% rise, you're not in any position to create alternatives.
If you suspect a bluff, one good way to expose the bluff is to ask "If we were to agree to your demand, then would you be prepared to sign the contract here and now?" If you don't ask this question, you run the risk making a concession only to face another demand. Often you will flush out more of their interests through asking this question.
Similar is "You are going to have to do better than that!" Again, we recommend your asking "How much better, and if we do, will you be willing to sign here and now?" You are not committing yourself, but merely exposing their intentions. Another response is to use the trading principle: "If we reduce your price, then we need you to increase your order."
Power of Print and Policies
We tend to lend the written word and company policies more weight and credibility than the spoken word and requests. For this reason we recommend you list your prices in writing rather than mention them verbally. Written words are viewed in a light of enhanced legitimacy, and are therefore less often challenged.
If presented with a price or company policy, ask who originally formulated the price or policy, and what interests it was intended to serve. They may not have thought about this policy before, and may realise that it is either defunct or does not apply.
If shown a list of client company names, choose a couple of companies and ask for details of what work they did, when, what the results were, whether they have testimonies to show.
You will hear the other side framing their appeal as being the 'fair' or 'right' way. In so doing, by disagreeing with their proposal, you run the risk of being branded 'unfair' or 'wrong'!
"If we agree to pay in 30 days, then it's only fair that you let us have our standard 5% discount". "Let's be fair and share the costs on this." "If I take this deal back to my boss, he will chew my ear off! Can you please help me out just a little?"
Remind the other party that you earned your trusted position through trading in negotiations. So if you make this concession for them, you will need a concession in return. If there are interests of yours that are not fully met, now is the time to bring them up. "If I give you a discount of 5%, then I need you to add product group Y to this order."
The moral appeal could mask an interest that has yet to be fully satisfied. In the third example you could enquire "So what interests would your boss want met, can you rank them?"
Also known as 'Name Dropping'. They may mention having done business with a VIP or esteemed company. Alternatively they may display picture in their office of themselves shaking hands with great leaders like Nelson Mandela. The danger lies in the human tendency of wanting to do business with people who are well connected.
Most important is to recognise what is happening and not to allow yourself to be influenced or swayed to treat this person any differently than you would have without this information.
If you think they are stretching the truth, enquire into what they did with the person or company, be interested and ask for details. If they mention a company ask for the name and position of the person they dealt with. If they become vague or change the topic you can draw your own conclusions.
The default tactic tests your thoroughness and diligence. You are given a benefit such as extra service or a more product, along with a contractual term or note saying that they assume these terms are to your liking. The onus falls upon you to get in touch with the other party and explain that you did not ask for these additional products or services. If you are lazy and either don't read all communication, or if you don't take action, you will be setting a precedent of tacit agreement that is difficult to escape from further down the line.
It is best to be firm when responding to a default tactic. Let the other party know that you the intention behind the products, and that you would value them clearing all variations to the agreement personally.
Negotiation Deliberate Mistake
This tactic plays on your ethics or lack thereof. You may be baited with a contract or offering that is clearly to your advantage - contrary to your discussions. The danger lies is you're eagerly signing before the other party realises their error or omission, only to have this matter brought to your attention and corrected later on. We recommend you point out the error or omission as soon as you notice it. This tactic, as with the others, has a way of boomeranging to catch up with you in the medium to longer term.
Negotiation Planted Information
It is somehow human nature to trust what we have learned about the other party by coincidence over what the other party is telling is about themselves. It is largely for this reason that (friendly) mergers and acquisitions (M&A) are often only announced shortly before being agreed between parties. The risk exists of the press publishing an unfounded and speculative article, thereby shooting holes in the trust that has been steadily building between companies and their shareholders. There are many case histories later documenting how one side 'leaked' information to the press in order to tilt the M&A negotiation in their favour.
As far as is practical, research the information at your disposal, and resist reacting in the moment. If you have a good relationship with the other party, you can save a lot of time by sharing the information with them, face to face, and asking for the truth behind it. If they verify the rumour to be true, ask for their sources.
Withdrawal comes in two main forms:
- Withdrawal of a previously agreed term or tentative agreement.
- Withdrawal from the negotiations altogether.
With the first, the other party will ask to claw back their side of an already agreed tentative agreement. Be careful to understand how circumstances have changed to justify their changed need. Consult your notes to see what you had promised in return, and remind them that you too will need to withdraw this item in return. Enquire as to what interests they are looking to satisfy, and look at creating new options together. Corporate negotiations are typically highly complex - requiring parties to sense when changes in circumstances and negotiating parties demand a revisit.
You will need to judge as to whether the second is a tactic or a real withdrawal. Listen very carefully to their wording to identify whether they are providing you with a conditional withdrawal. "We are going to have to break off discussions with your insistence on a 50% share in this venture!" Here you are given the 50% share condition/demand to overcome, without knowing their underlying interest. Start by pacing areas you know you are in agreement over. Your overarching reason for meeting, your sharing interests, and the areas agreed so far. Once you are both back in an agreement frame, enquire into why they don't want you to have a 50% share. I may be that in China joint ventures are controlled by the government. Perhaps you can appoint the CEO whilst they appoint the Chairperson, and your decision making procedures allow you to veto any proposals despite their 51% share. They get the public perception of control, you get equal say.
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