Negotiation is rooted in the basic human need for acceptance and understanding.
The key to successful negotiation is becoming an active listener. By actively listening, we demonstrate empathy towards the other party and genuinely seek to understand their perspective and experiences. We should make the other party feel like a partner, not an opponent.
Negotiation is an act of discovery, not a battle of arguments. Focus on uncovering information, not winning points.
Validate their concerns and emotions. Build trust and safety so they feel comfortable opening up.
Make your sole focus understanding what the other party needs and wants. Listen closely to what they say.
Don't rush the process. The other party may feel unheard. This undermines rapport and trust.
There are 3 negotiator voice types you should use:
Playful/positive voice: this should be the default voice. Easygoing and light. Positivity encourages collaboration.
Late-night FM DJ voice: Calm, slow. Creates authority and trust without defensiveness. Use this voice to make a point.
The direct/assertive voice: This should be used as rarely as possible because this has the potential to create pushback.
Mirroring is a powerful technique in negotiations, repeating the last few (1-3) critical words to create a sense of comfort and empathy. It also buys time and encourages the other party to continue the conversation to reveal more information.
A study showed that waiters who used mirroring received 70% higher tips compared to those who used positive reinforcement.
Tactical empathy is critical in negotiations. It involves understanding the other party's feelings and mindset.
Closely observing facial expressions, gestures, and tone of voice creates neural resonance, which gives you insight into their thoughts and emotions.
Labeling is a way to validate someone's emotions by acknowledging them.
To identify feelings, pay attention to changes in the other party's responses to your words during negotiation.
Labels can be framed as statements or questions, starting with phrases like "It seems like...," "It looks like...," or "It sounds like..."
People's emotions have presenting behavior (visible) and underlying feelings (motivation behind behavior). Labeling can bring out the underlying feelings.
Labeling diffuses negative emotions and reinforces positive emotions.
Do an accusation audit by listing every negative thing your counterpart could say about you at the start. For example, "You likely think I'm disrespecting you with this offer." This taps into their empathy, prompting them to reassure you that you're not as bad as they thought.
Pushing for a hard "Yes" in negotiations can be counterproductive and create resistance from the other party.
There are three types of "Yes": counterfeit (they plan to say "No" but "Yes" is easier), confirmation (reflexive response), and commitment (leading to a definite outcome).
Learn to master “No”.
"No" is not the end of negotiation but an opportunity to clarify desires by eliminating what is undesirable.
"No" can have various meanings, such as not being ready to agree, feeling uncomfortable, needing more information, etc.
Instead of asking “Is it a good time to talk?”, ask “Is it a bad time to talk?” A “No” will get total focus, a “Yes” will prompt a clear indication of their availability.
"No" brings real issues to the forefront, prevents poor decisions, and provides time for analysis.
Trigger "No" to make the speaker feel safe and in control.
"That's right" is a powerful signal that your counterpart has embraced your statement. It provides insight into their mindset and enables you to align their views with your preferred course of action.
To elicit a "That's right," summarize their story in your words to demonstrate genuine understanding.
When someone says it, they feel understood and respected, making them more receptive to your ideas.
"Fair" is the most powerful word in negotiation, and being perceived as fair is crucial for success. Earn a reputation as being fair by using the following tactics:
Persuade the other party that they have something to lose if the deal fails. People take more risks to avoid a loss than realize a gain (loss aversion bias).
Anchor their emotions by acknowledging their fears to activate their loss aversion bias.
Let the other party go first in monetary negotiations to use their anchor as a reference point. Their first price point might be better than expected.
Establish a reasonable price range with evidence and data to support its fairness.
Include non-monetary terms in your offer to make it more reasonable and appealing.
Use the framing effect to your advantage. Framing effect causes people to respond differently to the same choices depending only on how they are presented. For instance, health-conscious shoppers are more likely to buy milk marketed as "99% fat-free" versus "1% fat"
Use odd numbers when discussing figures as they appear well-calculated rather than placeholders ($98,375 instead of $100,000).
Surprise them with an unrelated gift.
Use calibrated open-ended questions to give your counterpart a sense of autonomy.
It helps the other party to realize what the problem is without explicitly telling them what the problem is, which could be seen as aggressive.
Use "how" or "what" in the questions. Don't use “why”.
For example, if faced with an unreasonable price, respond with "How am I supposed to do that?" The strategic benefit is that these questions put your counterpart to work helping you. You get the other person to provide solutions to your problems.
Other examples: "What about this is important to you?", "How can I help make this better for us?", "How would you like me to proceed?", "What is it that brought us into this situation?", "How can we solve this problem?", "What are we trying to accomplish here?"
The 7-38-55 Percent Rule states that in communication, only 7% of meaning comes from the words used, while 38% comes from tone of voice and 55% from body language and facial expressions.
Pay close attention to whether the other party's tone and body language aligns with the literal meaning of their words. If they don't match, it's a sign of deception.
Study shows that liars use more words and ramble more. They also use more distant third-person pronouns like "they," "them," and "we" while avoiding "I" or "me." They're used to psychologically distance the liar from the deception.
Rule of Three suggests you should try to get the other party to say “yes” three times on the same topic because it is difficult to lie or fake conviction repeatedly.
The Ackerman Model is a useful negotiation tool. The steps are:
Set your target offer price/goal.
Set your first offer at 65% of your target.
Calculate three raises of decreasing increments (to 85%, 95%, and 100%).
Say “no” empathetically before you increase your offer (“I'm sorry I just can't get it done at that price.”)
Use precise, non-round numbers in your offers ($98,493 instead of $100,000).
On your final number, offer a non-monetary item to show that you are at your limit.
Negotiation is fundamentally an information-gathering exercise. Black Swans refer to hidden info that would completely change the outcome of the negotiation.
Example: If you're buying, learning that the seller has financial pressures gives you leverage. This is your Black Swan.
To find Black Swans, prefer face-to-face interactions to read verbal and body language cues, and build rapport through the Similarity Principle (people trust others they perceive as similar to themselves, so finding common ground helps create a more open environment).