Saturday, January 22, 2011

40 Brilliant Negotiation Tricks Every ‘B’ School Student Should Know

While some people are born with great negotiation skills, most of us have to put forth a lot of effort and learn through trial, error and practice what works and what doesn’t. Whether you’re in business school right now or have just graduated, these negotiation tactics are good to know when you’re in the heat of things and can help you get the better end of a deal– no matter what it is.

Business Basics
These negotiation tactics and tricks will help you lead in business no matter what you’re trying to get, whether it’s a raise or a better deal on a new refrigerator.
  1. Patience. You might want to pounce on any opportunity, but sometimes patience can truly be a virtue. Wait for just the right time to play your cards and you could see a much better payoff.
  2. Persistence. While sometimes being overly persistent can do you in, finding the right balance between drive and stalking can be a great way to get what you want. Showing whomever you’re negotiating with that you’re serious about what you want can really help your case.
  3. Research. The more you know, the greater advantage you’ll have in a negotiation situation. Whether you’re buying a car, trying to get a job, asking for a raise or just about anything else, knowledge is power.
  4. Split the Difference. No matter whom it favors more, this negotiation tactic appears fair and may help to seal the deal. It works best when used in conjunction with other methods, like anchoring or legitimacy.
  5. Be in demand. Letting it slip that you’re considering other offers can help make businesses more eager to hire you or to bump up your salary.
  6. The Innocent Question. No questions in a negotiation are innocent. All can be used to glean information that can help tip the negotiation in favor of one party over another. So, ask away. It’ll make you seem friendlier, keep things running smoothly and make you smarter.
  7. Never Make the First Offer. In most situations, you don’t want to be the one making the first offer – it could garner you less than you might have gotten otherwise. Stick it out until you’re forced to ask.
  8. Ask for More. Want to get the best deal? Always ask for more than you actually want or are willing to settle for.
  9. Accentuate the Positive. One great way to approach a negotiation is by knowing both the strong and weak points of your side. Accentuate the good stuff while putting little emphasis on the bad. For instance, if you’re selling a house, focus on the big pool in the backyard, not the proximity to the airport.
  10. Strong and silent. It might seem counterintuitive, but sometimes the best thing you can do for your negotiations is to sit down and shut up. Silence can make people nervous and uneasy and much more willing to please.
  11. The Trade Off. Here you’ll find a tactic that works because it appears to be very fair and even-handed. In it, both parties agree to make concessions– but each without really knowing the true value of what they’re conceding.
  12. Ignoring No. In most cases, ignoring it when someone says “no” can get you in big trouble, but in negotiations it’s sometimes understood that no really means maybe, under the right circumstances. To counter no, you’ll need to react by asking the other party to tell you about it and lay out just where they stand. It forces them to play their hand and could let you actually negotiate a better deal.
  13. Stalling. Delaying and stalling negotiations can work if you’re trying to wear down the other side and get them to give in just to be done with the whole affair.
  14. Aristotle’s Appeals. Your powers of persuasion will be much stronger when you employ these three: ethos, pathos and logos. In English, that means appeal to ethics and reputation, emotion, or logic.
If you’re looking to buy, no matter if it’s a big or small purchase, consider these methods of negotiation.
  1. Take up their time. The more time you take up when someone is trying to sell you something, the more they’ll want to ensure that you don’t walk away.
  2. Be reluctant. Always make it seem as if you’re just looking and you’re not ready to buy yet. If you let on you’re ready to make a purchase, prices may go up.
  3. Bracket. When you’re negotiating, you likely have a place where you want to end up. To use this method, make a counteroffer that averages out with the initial offer right at where you want to be.
  4. Walk Away. Sometimes all it takes to seal the deal is to walk away. Once the seller knows you’re willing to give it up, they may be more willing to negotiate.
  5. The Wince. A wince or flinch will physically show your displeasure with a particular deal– just don’t overdo it. Follow it up with a bit of silence and things could be uncomfortable– and that’s just what you want. This method works with both ends of the deal, so watch out.
  6. Nibbling. When trying to get the best deal, sometimes you can still negotiate even after the main part is settled. These small nibbles seem like little concessions, but can really add up.
  7. Big Favor, Little Favor. In this situation, you’ll make an outrageous request for a concession. It will, of course, be denied. Then you’ll make a much smaller request, which was your intention all along, which will seem much fairer, and is more likely to be accepted in comparison with your previous request.
  8. The Calculated Blow-Up. While it won’t work in all situations where you’ll be negotiating, sometimes a fake blow-up can get you what you want. Whether that’s a refund from a store or a better deal with a seller, that’s up to you.
  9. Do Better. This tactic involves simply asking the other party to do better than what they’re offering. If they can’t, you’ll have to walk away.
  10. Low Key. It can be helpful not to appear too enthusiastic during business negotiations. You want to have something to hold back and not let on how much you really want to make the deal.
  11. The Red Herring. In a red herring situation, you’ll make a miniscule point of contention into something huge. This will distract from the concessions you’re really trying to get the other side to make, which will seem small now, in comparison to this huge other, actually unimportant issue that you’ve raised.
  12. Low-Balling. When you’re buying, make an offer so low you know it’ll never be accepted. Then, any other offer you make will seem much more reasonable.
If you’re on the selling end, then these negotiation tactics may suit your needs better and help you make the most from any deal.
  1. Pre-conditioning. You can start using this tactic before you even meet with the other party by laying out your terms before he or she even has a chance to think about a counter-move.
  2. Anchoring. Studies have shown that when people are torn when making an uncertain decision, they tend to anchor on certain information. You can use this to your advantage in your negotiations and set the tone of what will take place.
  3. Hot Potato. In this tactic, someone can take their problem and make it yours, or vice versa. If there’s a hitch in a deal, this tactic involves using it as a negotiation point, asking the other party to move in your direction to solve the problem.
  4. Higher Authority. To use this tactic, you’ll have to act as though you don’t have the final approval on whether or not to make a deal and will have to check with your partner, boss, etc. Of course, this higher authority won’t like the deal and will return with a counteroffer.
  5. Legitimacy. Find some outside sources to support your side of the negotiation, and whomever you’re negotiation with is bound to believe it. This bias can gain you a big advantage in any negotiation.
  6. The Withdrawn Offer. Want to trick the other party into thinking they’ve gotten an amazing deal? Use this ruse. Pretend to withdraw your offer because it’s too low or won’t work for you, and the other side is likely to pounce on it.
  7. The Other Buyer. Your buyer will be a little more motivated to negotiate if he or she is alerted to the presence of another buyer. If they really want what you’re selling, this tactic can score you a better deal and close it faster.
  8. Decoys. In this tactic, you’ll create something that you do not care about, but which you treat as if is very important. Then you’ll offer to give it up. It can help you get something you want without having to give up much of anything.
  9. Give it a human face. One way to get the better end of a deal is to make the other party feel connected to you. If they don’t want to hurt you, your business partners or your family then it’ll be a lot more difficult for them to play hardball with you.
  10. Good Guy, Bad Guy. If you’ve got a negotiation partner, you can try out this method. One of you will play the nice guy; the other will be a bit of a pill. The nice guy will close the deal after the not-so-nice guy blows up.
  11. Funny Money. You can help make big amounts of money seem piddling by dividing them out into costs per day. This tactic works because buyers will things the amount is small, but it will add up to a hefty sum in your pocket.
  12. The Trial Balloon. This tactic can work wonders when selling, because it lets you get clues about the other party’s plans without compromising your position or having to make a real commitment.
  13. The Presumptive Close. Asking a question that implies that a deal has already been made can help to push negotiations along. Dealing with issues like how payments will be made and trades completed can change the mindset of the other party.
  14. Puppy Dog Close. This sale is named after a technique used by pet store salespeople. It offers to let the other side try out the deal (or new pet) for a trial period. If they’re not happy, they can renege. It works because not only is the sale made by the negotiator but by the mechanics of the deal (or the pet) itself.
Special guest post by Rose King