| The way that you conduct yourself in a negotiation | | | | total cost of materials. An hourly increase in pay per |
| can dramatically the outcome. I've been teaching | | | | person rather than the annual cost of the increase to |
| negotiating to business leaders throughout North | | | | the company. Insurance premiums as a monthly |
| America since 1982 and I've distilled this down to five | | | | amount rather than an annual cost. The price of land |
| essential principles. These principles are always at | | | | expressed as the monthly payment.Businesses know |
| work for you and will help you smoothly get what | | | | that if you're not having to pull real money out of |
| you want:Get the Other Side to Commit FirstPower | | | | your purse or pocket, you're inclined to spend more. |
| Negotiators know that you're usually better off if | | | | It's why casinos the world over have you convert |
| you can get the other side to commit to a position | | | | your real money to gaming chips. It's why |
| first. Several reasons are obvious: Their first offer | | | | restaurants are happy to let you use a credit card |
| may be much better than you expected. It gives | | | | although they have to pay a percentage to the |
| you information about them before you have to tell | | | | credit card company. When I worked for a |
| them anything. It enables you to bracket their | | | | department store chain, we were constantly pushing |
| proposal. If they state a price first, you can bracket | | | | our clerks to sign up customers for one of our credit |
| them, so if you end up splitting the difference, you'll | | | | cards because we knew that credit card customers |
| get what you want. If they can get you to commit | | | | will spend more and they will also buy better quality |
| first, they can then bracket your proposal. Then if | | | | merchandise than a cash customer. Our motivation |
| you end up splitting the difference, they get what | | | | wasn't entirely financial in pushing credit cards. We |
| they wanted.The less you know about the other side | | | | also knew that because credit card customers would |
| or the proposition that you're negotiating, the more | | | | buy better quality merchandise, it would satisfy them |
| important the principle of not going first becomes. If | | | | more, and they would be more pleased with their |
| the Beatles' manager Brian Epstein had understood | | | | purchases.So, when you're negotiating break the |
| this principle he could have made the Fab Four millions | | | | investment down to the ridiculous because it does |
| more on their first movie. United Artists wanted to | | | | sound like less money, but learn to think in real |
| cash in on the popularity of the singing group but | | | | money terms. Don't let people use the Funny Money |
| was reluctant to go out on a limb because United | | | | Gambit on you.Concentrate on the IssuesPower |
| Artists didn't know how long the Beatles would stay | | | | Negotiators know that they should always |
| popular. They could have been a fleeting success that | | | | concentrate on the issues and not be distracted by |
| fizzled out long before their movie hit the screens. So | | | | the actions of the other negotiators. Have you ever |
| they planned it as an inexpensively made exploitation | | | | watched tennis on television and seen a highly |
| movie and budgeted only $300,000 to make it. This | | | | emotional star like John McEnroe jumping up and |
| was clearly not enough to pay the Beatles a high | | | | down at the other end of the court. You wonder to |
| salary. So United Artists planned to offer the Beatles | | | | yourself, "How on Earth can anybody play tennis |
| as much as 25 percent of the profits. The Beatles | | | | against somebody like that? It's such a game of |
| were such a worldwide sensation in 1963 that the | | | | concentration, it doesn't seem fair."The answer is |
| producer was very reluctant to ask them to name | | | | that good tennis players understand that only one |
| their price first, but he had the courage to stay with | | | | thing affects the outcome of the game of tennis. |
| the rule. He offered Epstein $25,000 up front and | | | | That's the movement of the ball across the net. |
| asked him what percentage of the profits he | | | | What the other player is doing doesn't affect the |
| thought would be fair. | | | | outcome of the game at all, as long as you know |
| Brian Epstein didn't know the movie business and | | | | what the ball is doing. So in that way, tennis players |
| should have been smart enough to play Reluctant | | | | learn to concentrate on the ball, not on the other |
| Buyer and use Good Guy/Bad Guy. He should have | | | | person.When you're negotiating, the ball is the |
| said, "I don't think they'd be interested in taking the | | | | movement of the goal concessions across the |
| time to make a movie, but if you'll give me your very | | | | negotiating table. It's the only thing that affects the |
| best offer, I'll take it to them and see what I can do | | | | outcome of the game; but it's so easy to be thrown |
| for you with them." Instead, his ego wouldn't let him | | | | off by what the other people are doing, isn't it?I |
| play dumb, so he assertively stated that they would | | | | remember once wanting to buy a large real estate |
| have to get 7.5 percent of the profits or they | | | | project in Signal Hill, California that comprised eighteen |
| wouldn't do it. This slight tactical error cost the group | | | | four-unit buildings. I knew that I had to get the price |
| millions when the director Richard Lester, to every | | | | far below the $1.8 million that the sellers were asking |
| one's surprise, created a brilliantly humorous portrait | | | | for the property, which was owned free and clear |
| of a day in the group's life that became a worldwide | | | | by a large group of real estate investors. A real |
| success.If both sides have learned that they shouldn't | | | | estate agent had brought it to my attention, so I felt |
| go first, you can't sit there forever with both sides | | | | obligated to let him present the first offer, reserving |
| refusing to put a number on the table, but as a rule | | | | the right to go back and negotiate directly with the |
| you should always find out what the other side | | | | sellers if he wasn't able to get my $1.2 million offer |
| wants to do first.Act Dumb, Not SmartTo Power | | | | accepted.The last thing in the world the agent |
| Negotiators, smart is dumb and dumb is smart. When | | | | wanted to do was present an offer at $1.2 |
| you are negotiating, you're better off acting as if you | | | | million-$600,000 below the asking price-but finally I |
| know less than everybody else does, not more. The | | | | convinced him to try it and off he went to present |
| dumber you act, the better off you are unless your | | | | the offer. By doing that, he made a tactical error. He |
| apparent I.Q. sinks to a point where you lack any | | | | shouldn't have gone to them; he should have had |
| credibility. | | | | them come to him. You always have more control |
| There is a good reason for this. With a few rare | | | | when you're negotiating in your power base than if |
| exceptions, human beings tend to help people that | | | | you go to their power base.He came back a few |
| they see as less intelligent or informed, rather than | | | | hours later, and I asked him, "How did it go?" |
| taking advantage of them. Of course there are a | | | | "It was awful, just awful. I'm so embarrassed." He |
| few ruthless people out there who will try to take | | | | told me. "I got into this large conference room, and all |
| advantage of weak people, but most people want to | | | | of the principals had come in for the reading of the |
| compete with people they see as brighter and help | | | | offer. They brought with them their attorney, their |
| people they see as less bright. So, the reason for | | | | CPA, and their real estate broker. I was planning to |
| acting dumb is that it diffuses the competitive spirit | | | | do the silent close on them." (Which is to read the |
| of the other side. How can you fight with someone | | | | offer and then be quiet. The next person who talks |
| who is asking you to help them negotiate with you? | | | | loses in the negotiations.) "The problem was, there |
| How can you carry on any type of competitive | | | | wasn't any silence. I got down to the $1.2 million and |
| banter with a person who says, "I don't know, what | | | | they said, 'Wait a minute. You're coming in $600,000 |
| do you think?" Most people, when faced with this | | | | low? We're insulted." Then they all got up and |
| situation, feel sorry for the other person and go out | | | | stormed out of the room.I said, "Nothing else |
| of their way to help him or her.Do you remember | | | | happened?"He said, "Well, a couple of the principals |
| the TV show Columbo? Peter Falk played a | | | | stopped in the doorway on their way out, and they |
| detective who walked around in an old raincoat and a | | | | said: 'We're not gonna come down to a penny less |
| mental fog, chewing on an old cigar butt. He | | | | than $1.5 million.' It was just awful. Please don't ever |
| constantly wore an expression that suggested he | | | | ask me to present an offer that low again."I said, |
| had just misplaced something and couldn't remember | | | | "Wait a minute. You mean to tell me that, in five |
| what it was, let alone where he had left it. In fact, | | | | minutes, you got them to come down $300,000, and |
| his success was directly attributable to how smart he | | | | you feel bad about the way the negotiations |
| was-by acting dumb. His demeanor was so disarming | | | | went?"See how easy it is to be thrown off by what |
| that the murderers came close to wanting him to | | | | the other people are doing, rather than concentrating |
| solve his cases because he appeared to be so | | | | on the issues in a negotiation. It's inconceivable that a |
| helpless.The negotiators who let their egos take | | | | full-time professional negotiator, say an international |
| control of them and come across as a sharp, | | | | negotiator, would walk out of negotiations because |
| sophisticated negotiator commit to several things | | | | he doesn't think the other people are fair. He may |
| that work against them in a negotiation. These | | | | walk out, but it's a specific negotiating tactic, not |
| include being the following: A fast decision-maker who | | | | because he's upset.Can you imagine a top arms |
| doesn't need time to think things over. Someone | | | | negotiator showing up in the White House, and the |
| who would not have to check with anyone else | | | | President saying, "What are you doing here? I |
| before going ahead. Someone who doesn't have to | | | | thought you were in Geneva negotiating with the |
| consult with experts before committing. Someone | | | | Russians.""Well, yes, I was, Mr. President, but those |
| who would never stoop to pleading for a concession. | | | | guys are so unfair. You can't trust them and they |
| Someone who would never be overridden by a | | | | never keep their commitments. I got so upset, I just |
| supervisor. Someone who doesn't have to keep | | | | walked out." Power Negotiators don't do that. They |
| extensive notes about the progress of the | | | | concentrate on the issues, not on the personalities. |
| negotiation and refer to them frequently.The Power | | | | You should always be thinking, "Where are we now, |
| Negotiator who understands the importance of acting | | | | compared to where we were an hour ago or |
| dumb retains these options: Requesting time to think | | | | yesterday or last week?" |
| it over so that he or she can thoroughly think | | | | Secretary of State Warren Christopher said, "It's |
| through the dangers of accepting or the opportunities | | | | okay to get upset when you're negotiating, as long |
| that making additional demands might bring. Deferring | | | | as you're in control, and you're doing it as a specific |
| a decision while he or she checks with a committee | | | | negotiating tactic." It's when you're upset and out of |
| or board of directors. Asking for time to let legal or | | | | control that you always lose.That's why salespeople |
| technical experts review the proposal. Pleading for | | | | will have this happen to them. They lose an account. |
| additional concessions. Using Good Guy/Bad Guy to | | | | They take it into their sales manager, and they say, |
| put pressure on the other side without confrontation. | | | | "Well, we lost this one. Don't waste any time trying |
| Taking time to think under the guise of reviewing | | | | to save it. I did everything I could. If anybody could |
| notes about the negotiation.I act dumb by asking for | | | | have saved it, I would have saved it."So, the sales |
| the definitions of words. If the other side says to | | | | manager says, "Well, just as a public relations |
| me, "Roger, there are some ambiguities in this | | | | gesture, let me give the other side a call anyway." |
| contract," I respond with, "Ambiguities . . .ambiguities . | | | | The sales manager can hold it together, not |
| . . hmmm, you know I've heard that word before, | | | | necessarily because he's any brighter or sharper than |
| but I'm not quite sure what it means. Would you | | | | the salesperson, but because he hasn't become |
| mind explaining it to me?" Or I might say, "Do you | | | | emotionally involved with the people the way the |
| mind going over those figures one more time? I | | | | salesperson has. Don't do that. Learn to concentrate |
| know you've done it a couple of times already, but | | | | on the issues.Always Congratulate The Other |
| for some reason, I'm not getting it. Do you mind?" | | | | SideWhen you're through negotiating, you should |
| This makes them think: What a klutz I've got on my | | | | always congratulate the other side. However poorly |
| hands this time. In this way, I lay to rest the | | | | you think the other person may have done in the |
| competitive spirit that could have made a | | | | negotiations, congratulate them. Say, "Wow-did you |
| compromise very difficult for me to accomplish. Now | | | | do a fantastic job negotiating that. I realize that I |
| the other side stops fighting me and starts trying to | | | | didn't get as good a deal as I could have done, but |
| help me.Be careful that you're not acting dumb in | | | | frankly, it was worth it because I learned so much |
| your area of expertise. If you're a heart surgeon, | | | | about negotiating. You were brilliant." You want the |
| don't say, "I'm not sure if you need a triple by-pass | | | | other person to feel that he or she won in the |
| or if a double by-pass will do." If you're an architect, | | | | negotiations.One of my clients is a large magazine |
| don't say, "I don't know if this building will stand up or | | | | publishing company that has me teach Power |
| not."Win-win negotiating depends on the willingness of | | | | Negotiating to its sales force. When I was telling the |
| each side to be truly empathetic to the other side's | | | | salespeople how they should never gloat in a |
| position. That's not going to happen if both sides | | | | negotiation, the founder of the company jumped to |
| continue to compete with each other. Power | | | | his feet and said, "I want to tell you a story about |
| Negotiators know that acting dumb diffuses that | | | | that." Very agitated, he went on to tell the group, |
| competitive spirit and opens the door to win-win | | | | "My first magazine was about sailing, and I sold it to |
| solutions.Think in Real Money Terms but Talk Funny | | | | a huge New York magazine publisher. I flew up there |
| MoneyThere are all kinds of ways of describing the | | | | to sign the final contract, and the moment I signed it |
| price of something. If you went to the Boeing | | | | and thanked them, they said to me, 'If you'd have |
| Aircraft Company and asked them what it costs to | | | | been a better negotiator, we would have paid you a |
| fly a 747 coast to coast, they wouldn't tell you | | | | lot more.' That was 25 years ago and it still burns me |
| "Fifty-two thousand dollars." They would tell you | | | | up when I think about it today. I told them that if |
| eleven cents per passenger mile.Sales-people call that | | | | they had been better negotiators, I would have |
| breaking it down to the ridiculous. Haven't we all had | | | | taken less." Let me ask you something. If that |
| a real estate salesperson say to us at one time or | | | | magazine publisher wanted to buy another one of his |
| another, "Do you realize you're talking $.35 a day | | | | magazines, would he start by raising the price on |
| here? You're not going to let $.35 a day stand | | | | them? Of course he would. However harmless it may |
| between you and your dream home are you?" It | | | | seem, be sensitive to how you're reacting to the |
| probably didn't occur to you that $.35 a day over the | | | | deal. Never gloat and always congratulate.When I |
| 30-year life of a real estate mortgage is more than | | | | published my first book on negotiating a newspaper |
| $7,000. Power Negotiators think in real money | | | | reviewed it and took exception to my saying that |
| terms.When that supplier tells you about a $.05 | | | | you should always congratulate, saying that it was |
| increase on an item, it may not seem important | | | | manipulative to congratulate the other side when you |
| enough to spend much time on. Until you start | | | | didn't really think that they had won. I disagree. I look |
| thinking of how many of those items you buy during | | | | upon it as the ultimate in courtesy for the conqueror |
| a year. Then you find that there's enough money | | | | to congratulate the vanquished. When the British |
| sitting on the table to make it well worth your while | | | | army and navy went down the Atlantic to recapture |
| to do some Power Negotiating.I once dated a | | | | the Falkland Islands from the Argentineans, it was |
| woman who had very expensive taste. One day she | | | | quite a rout. Within a few days, the Argentine navy |
| took me to a linen store in Newport Beach because | | | | lost most of its ships and the victory for the English |
| she wanted us to buy a new set of sheets. They | | | | was absolute. The evening after the Argentinean |
| were beautiful sheets, but when I found out that | | | | admiral surrendered, the English admiral invited him on |
| they were $1,400, I was astonished and told the | | | | board to dine with his officers and congratulated him |
| sales clerk that it was the kind of opulence that | | | | on a splendid campaign.Power Negotiators always |
| caused the peasants to storm the palace gates.She | | | | want the other parties thinking that they won in the |
| calmly looked at me and said, "Sir, I don't think you | | | | negotiations. It starts by asking for more than you |
| understand. A fine set of sheets like this will last you | | | | expect to get. It continues through all of the other |
| at least 5 years, so you're really talking about only | | | | Gambits that are designed to service the perception |
| $280 a year." Then she whipped out a pocket | | | | that they're winning. It ends with congratulating the |
| calculator and frantically started punching in numbers. | | | | other side.If you let these five principles guide your |
| "That's only $5.38 a week. That's not much for what | | | | conduct when you're negotiating, they will serve you |
| is probably the finest set of sheets in the world."I | | | | well and help you become a Power Negotiator.Roger |
| said, "That's ridiculous."Without cracking a smile, she | | | | Dawson |
| said, "I'm not through. With a fine set of sheets like | | | | Founder of the Power Negotiating Institute |
| this, you obviously would never sleep alone, so we're | | | | 800-932-9766 |
| really talking only 38 cents per day, per person." Now | | | | Dawson is the author of two of Nightingale-Conant's |
| that's really breaking it down to the ridiculous.Here are | | | | best selling audiocassette programs, Secrets of |
| some other examples of funny money:Interest rates | | | | Power Negotiating and Secrets of Power Negotiating |
| expressed as a percentage rather than a dollar | | | | for Salespeople. This article is excerpted in part from |
| amount. The amount of the monthly payments being | | | | Roger Dawson's new book - "Secrets of Power |
| emphasized rather than the true cost of the item. | | | | Negotiating", published by Career Press and on sale in |
| Cost per brick, tile, or square foot rather than the | | | | bookstores everywhere for $24.99. |