Read an Excerpt
Secrets of Power Negotiating
Updated for the 21st Century
By Roger Dawson, Jodi Brandon
Career PressCopyright © 2011 Roger Dawson
All rights reserved.
Ask for More Than You Expect to Get
One of the cardinal rules of Power Negotiating is you should ask the other side for more than you expect to get. Henry Kissinger went so far as to say, "Effectiveness at the conference table depends upon overstating one's demands." Some reasons why you should do this are:
* Why should you ask the store for a bigger discount than you think you have a chance of getting?
* Why should you ask your boss for an executive suite, although you think you'll be lucky to get a private office?
* If you're applying for a job, why should you ask for more money and benefits than you think they'll give you?
* If you're dissatisfied with a meal in a restaurant, why should you ask the maitre'd to cancel the entire bill, even though you think they will take off only the charge for the offending item?
If you have thought about this, you probably came up with a few good reasons to ask for more than you expect to get. The obvious answer is it gives you some negotiating room. If you're selling, you can always come down, but you can never go up in price. If you're buying, you can always go up, but you can never come down. (When we get to Chapter 14, I'll show you how to nibble for more. Some things are easier to get at the end of the negotiation than they are at the beginning.) What you should be asking for is your MPP—your maximum plausible position. This is the most you can ask for and still have the other side see some plausibility in your position.
The less you know about the other side, the higher your initial position should be, for two reasons:
1. You may be off in your assumptions. If you don't know the other person or his needs well, he may be willing to pay more than you think. If he's selling, he may be willing to take far less than you think.
2. If this is a new relationship, you'll appear more cooperative if you're able to make larger concessions. The better you know the other person and his needs, the more you can modify your position. If the other side doesn't know you, their initial demands may be more outrageous.
If you're asking for more than your maximum plausible position, imply some flexibility. If your initial position seems outrageous to the other person and your attitude is "take it or leave it," you may not even get the negotiations started. The other person's response may be, "Then we don't have anything to talk about." You can get away with an outrageous opening position if you imply some flexibility.
If you're buying real estate directly from the seller, you might say, "I realize that you're asking $200,000 for the property and, based on everything you know, it may seem like a fair price to you. Perhaps you know something that I don't know, but based on all the research that I've done, it seems to me that we should be talking something closer to $160,000." At that point the seller may be thinking, "That's ridiculous. I'll never sell it for that, but he does seem to be sincere, so what do I have to lose if I spend some time negotiating with him, just to see how high I can get him to go?"
If you're a salesperson, you might say to the buyer, "We may be able to modify this position once we know your needs more precisely, but based on what we know so far about the quantities you'd be ordering, the quality of the packaging, and not needing just-in-time inventory, our best price would be in the region of $2.25 per widget." At that the other person will probably be thinking, "That's outrageous, but there does seem to be some flexibility there, so I think I'll invest some time negotiating with her and see how low I can get her to go."
Unless you are already an experienced negotiator, here is the problem you will have with this. Your real MPP is probably much higher than you think it is. We all fear being ridiculed by the other person (something that I'll talk more about later when we discuss Coercive Power in Chapter 55). We're all reluctant to take a position that will cause the other person to laugh at us or put us down. Because of this intimidation, you will probably feel like modifying your MPP to the point where you're asking for less than the maximum amount that the other person would think is plausible.
Another reason for asking for more than you expect to get will be obvious to you if you're a positive thinker: You might just get it. You don't know how the universe is aligned that day. Perhaps your patron saint is leaning over a cloud looking down at you and thinking, "Wow, look at that nice person. She's been working so hard for so long now. Let's just give her a break." You might just get what you ask for and the only way you'll find out is to ask for it.
In addition, asking for more than you expect to get increases the perceived value of what you are offering. If you're applying for a job and asking for more money than you expect to get, you implant in the personnel director's mind the thought that you are worth that much. If you're selling a car and asking for more than you expect to get, it positions the buyer into believing that the car is worth more.
Another advantage of asking for more than you expect to get is it prevents the negotiation from deadlocking. Look at the Persian Gulf War. What were we asking Saddam Hussein to do? (Perhaps asking is not exactly the right word.) President George Bush, in his State of the Union address, used a beautiful piece of alliteration, probably written by Peggy Noonan, to describe our opening negotiating position. He said, "I'm not bragging, I'm not bluffing, and I'm not bullying. There are three things this man has to do. He has to get out of Kuwait. He has to restore the legitimate government of Kuwait (don't do what the Soviets did in Afghanistan and install a puppet government), and he has to make reparations for the damage that he's done."
That was a very clear and precise opening negotiating position. The problem was that this was also our bottom line. It was also the least for which we were prepared to settle. No wonder the situation deadlocked. It had to deadlock because we didn't give Saddam Hussein room to have a win. If we'd have said, "Okay. We want you and all your cronies exiled. We want a non-Arab neutral government installed in Baghdad. We want United Nations supervision of the removal of all military equipment. In addition, we want you out of Kuwait, the legitimate Kuwaiti government restored, and reparation for the damages that you did." Then we could have gotten what we wanted and still given Saddam Hussein a win.
I know what you're thinking. You're thinking, "Roger, Saddam Hussein was not on my Christmas card list last year. He's not the kind of guy I want to give a win to." I agree with that. However, it creates a problem in negotiation. It creates deadlocks.
* * *
The Persian Gulf War was a situation where it served our purpose to create a deadlock. What concerns me is that, when you're involved in a negotiation, you are inadvertently creating deadlocks, because you don't have the courage to ask for more than you expect to get. A final reason why Power Negotiators say you should ask for more than you expect to get is that it's the only way you can create a climate where the other person feels that he or she won.
If you go in with your best offer up front, there's no way you can negotiate with the other side and leave them feeling that they won. These are the inexperienced negotiators always wanting to start with their best offer. This is the job applicant who thinks, "This is a tight job market, and if I ask for too much money, they won't even consider me."
This is the person who's selling a house or a car and thinking, "If I ask for too much, they'll just laugh at me." This is the salesperson who is saying to her sales manager, "I'm going out on this proposal today, and I know it's going to be competitive. I know they're getting bids from people all over town. Let me cut the price up front, or we won't stand a chance of getting the order." Negotiators know the value of asking for more than you expect to get.
Let's recap the reasons for asking for more than you expect to get:
* You might just get it.
* It gives you some negotiating room.
* It raises the perceived value of what you're offering.
* It prevents the negotiation from deadlocking.
* It creates a climate in which the other side feels that they won.
In highly publicized negotiations, such as when the football players or airline pilots go on strike, the initial demands both sides make are outlandish. I remember being involved in a union negotiation in which the initial demands were unbelievably outrageous. The union's demand was to triple the employees' wages. The company's opening was to make it an open shop—in other words, a voluntary union that would effectively destroy the union's power at that location.
When Sudanese rebels took three Red Cross workers hostage, they demanded $100 million for their release. Fortunately, nobody took this seriously, and they quickly dropped their demand to $2.5 million. Congressman Bill Richardson, who would later ride his negotiating skills all the way to being our ambassador to the United Nations, sat under a tree, ignoring the rebels who were waving guns at him. He eventually secured their release for five tons of rice, four old jeeps, and some radios from Red Cross relief supplies.
I remember being in Beijing, China, when they first started admitting visitors. I wanted a pedishaw ride to my hotel that was only two blocks away. (A pedishaw is like a rickshaw, but it has a bicycle on the front.) When the pedishaw drivers realized that I was an American, they went wild with delight. They all gathered around, apparently oblivious to my presence, and advised the lucky driver how to handle the negotiations with me. One of them told him to ask me for $10, another said $20, and finally, they agreed that $50 would be an appropriate place to start the negotiations. I eventually gave him $1, which was more than a day's wages, and he was very happy.
Power Negotiators know that the initial demands in these types of negotiations are always extreme, so they don't let it bother them. They know that as the negotiations progress, they will work their way toward the middle, where they will find a solution that both sides can accept. Then they can both call a press conference and announce that they won in the negotiations.
* * *
The next question has to be: If you're asking for more than you expect to get, for how much more than you expect to get should you ask? The answer is that you should bracket your objective. Your initial proposal should be an equal distance on the other side of your objective as their proposal.
Let me give you some simple examples:
* The car dealer is asking $15,000 for the car. You want to buy it for $13,000. Make an opening offer of $11,000.
* One of your employees is asking if she can spend $400 on a new desk. You think that $325 is reasonable. You should tell her that you don't want her to exceed $250.
* You're a salesperson, and the buyer is offering you $1.60 for your widgets. You can live with $1.70. Bracketing tells you that you should start at $1.80. Then if you end up in the middle, you'll still make your objective.
Of course it's not always true you'll end up in the middle, but that is a good assumption to make if you don't have anything else on which to base your opening position. Assume you'll end up in the middle, between the two opening negotiating positions. If you track this, I think that you'll be amazed at how often it happens.
In little things. Your son comes to you and says he needs $20 for a fishing trip he's going on this weekend. You say, "No way. I'm not going to give you $20. Do you realize that when I was your age I got 50 cents a week allowance and I had to work for that? I'll give you $10 and not a penny more."
Your son says, "I can't do it for $10, Dad."
Now you have established the negotiating range. He's asking for $20. You're willing to pay $10. See how often you end up at $15. In our culture, splitting the difference seems fair.
* * *
In little and in big things, we end up splitting the difference. With bracketing, Power Negotiators are assured that if that happens, they still get what they want. To bracket, you get the other person to state his or her position first. If the other person can get you to state your position first, then he or she can bracket you so that, if you end up splitting the difference, as so often happens, the other person ends up getting what he or she wanted. That's an underlying principle of negotiating to which I'll return later (in Chapter 26). Get the other person to state his or her position first. It may not be as bad as you fear, and it's the only way you can bracket a proposal.
Conversely, don't let the other person trick you into committing first. If the status quo is fine with you, and there is no pressure on you to make a move, be bold enough to say to the other person, "You're the one who approached me. The way things are satisfies me. If you want to do this, you'll have to make a proposal to me."
Another benefit of bracketing is that it tells you how big your concessions can be as the negotiation progresses. Let's take a look at how this would work with the three situations I described earlier. The car dealer is asking $15,000 for the car. You want to buy it for $13,000. You made an opening offer of $11,000. Then if the dealer comes down to $14,500, you can go up to $11,500 and you will still have your objective bracketed. If the dealer's next move is to $14,200, you can also shift your position by $300 and go to $11,800.
One of your employees is asking if she can spend $400 on a new desk. You think $325 is reasonable. You suggest $250. If the employee responds by saying she may be able to get what she needs for $350, you can respond by telling her that you'll be able to find $300 in the budget. Because you've both moved $50, your objective will still be in the middle.
Remember the buyer offering you $1.60 for your widgets? You told the buyer that your company would be losing money at a penny less than $1.80. Your goal is to get $1.70. The buyer comes up to $1.63. You can now move down to $1.77 and your goal will still be in the middle of the two proposals that are on the negotiating table. In that way, you can move in on your target and know if the other side offers to split the difference, you can still make your goal.
Excerpted from Secrets of Power Negotiating by Roger Dawson, Jodi Brandon. Copyright © 2011 Roger Dawson. Excerpted by permission of Career Press.
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