It was locker-room talk that triggered the idea to write this article.
After my usual swimming routine in a gym, while passing through London, I overheard two elderly gentlemen lamenting: “There are so many things they should have taught us in school, but didn’t. Stuff like how to manage a bank account and your financial affairs, nutrition, how to strike up a conversation in a room where you don’t know anyone, and so on.”
“YES!”, I thought to myself.
All the stuff we should have been taught in school, but which weren’t part of the curriculum, is one of my pet peeves.
I am seriously hung up about the subject and have been so for a long time. So much time wasted during your early years while you had to study mostly useless subjects, so much effort required to teach things yourself at a later stage, and so much pain endured learning lessons that would have been avoidable had the school system prepared you for life.
Which triggered the thought that I should really write that long overdue article about a skill that I recently – and belatedly – started to work on improving for myself, and which I have come to realise is one of the least appreciated but also one of the most powerful skills to have.
Negotiating, that is.
A skill that everyone thinks they know something about. Upon closer inspection, though, hardly anyone even has the slightest clue. That’s what I have come to realise after witnessing a particularly powerful negotiating experience from up close, and based on the reading I have done about the subject since.
Here is a ten-minute primer to get you going onto a journey that I am now on myself, and which I intend to remain on for the foreseeable future.
False ideas of what negotiating is (and isn’t) are widespread
Our Western societies instil a few powerful values and standards in all of us, among them a desire to be agreeable and safe.
Once you have started to teach yourself about negotiating skills, you get to realise how these societal standards influence the way the vast majority of people “negotiate” (if it even deserves that name).
“We meet in the middle and split the difference” is probably the single most often-used “negotiating” tactic. Hand on heart, have you ever used this approach? There you go! I doubt there is anyone who hasn’t. It’s almost a societal standard.
Splitting the difference is an easy way, and it saves face. There is no hard work involved, and no one gets hurt. It also feels good to get at least half the pie. You have won part of the battle! Or so you think.
Just what a weak, unsophisticated negotiating tactic this is becomes clear when you picture yourself negotiating for the freedom of four hostages. Would you ever say: “Okay, you can shoot dead two of the hostages, but in exchange, you let go of the other two.”
Incidentally, some of the best books about negotiating were written by people who have been involved in negotiating hostage situations. Because of what’s at stake in these negotiations, the people who manage them have undergone years of training in every imaginable negotiating tactic.
“We meet in the middle and split the difference” is probably the single most often-used “negotiating” tactic.
One of those books dissected the negotiating for a hostage who was supposed to be released in exchange for $150,000, “or the hostage will die.” You’d expect the negotiator to either have paid the full amount to secure the hostage, or to have agreed on a compromise such as $75,000 or $100,000.
However, this negotiator got the hostage released for $4,751. That was less than 3% of what the hostage-takers asked for. No meeting in the middle there, despite the threat of the hostage’s imminent death!
How did they do it?
I was recently involved in a business transaction where my side had a master negotiator on board. It was during this transaction that I learned just how financially and strategically valuable it is to be correctly trained in negotiating, instead of treating it as a skill you pick up somewhere along the road.
Because of the negotiating skills my side counted on its time, we left with probably about ten times more money than the other side had first offered us. Seeing the numbers involved and myself benefitting from the final deal, I drew the conclusion that negotiating skills is something I also urgently had to invest more of my own time into.
After all, no one had taught me these skills in school!
3 key aspects (and a few quick wins) for you to take home today
I would like to start the rest of this article with a disclaimer.
This article isn’t going to give you all the answers and techniques, but I’ll hopefully inspire you to invest more in honing and developing these skills over the years to come.
There are countless articles on negotiating skills available on the web. The vast majority of them are generalistic drivel, asking you to “stay cool” and “do your homework.” Another large portion seem to give you advice that works in some circumstances (e.g., “never be the first to make an offer”), but fail to mention that in other circumstances the exact opposite will apply.
The quality of available information about negotiating is indicative of a broader issue. Negotiating is an extremely complex skill set, best comparable to learning a new language. Any article that promises you “How to pick up killer negotiating skills in 15 minutes” is akin to promising you to learn Italian in a quarter of an hour. You can pick up some sentences for ordering in a restaurant during that time, but you won’t be able to seduce an Italian girl.
However, besides inspiring you to gradually teach you the required skills, I also have some quick wins for you. These will also illustrate that you can teach yourself a set of tools, which you can then selectively use in negotiations.
Negotiating is an extremely complex skill set, best comparable to learning a new language.
1. Quick-win negotiating skills
You can immediately stop ever again using the meet-in-the-middle pitfall if you apply a simple but systematised and effective method for a haggling system.
Try out this aide-memoire the next time you negotiate a price for something:
- Define (in your mind) the target price that you are willing to pay.
- Then offer 65% of that.
- Think of a number of ways for empathetically but explicitly saying “No” when the other party makes a counter-offer. (This is where practice comes in really handy!)
- Calculate three increased offers but on decreasing increments: 85%, 95%, and 100%.
- When making the last and final offer, make it an exact, non-round number, e.g., $123.75 instead of $125. Psychologically, this gives the number credibility and weight.
Depending on what sort of negotiating situation you are in, you can also add an additional step. If you have made your final offer and it is still not accepted, add an intangible item to your offer; one that doesn’t cost you anything.
E.g., when I used to run an event and media business, I often resorted to offering potential clients to get their face (i.e., that of their CEO) onto the cover of our magazine. Since we had to put someone onto each magazine cover anyway, this didn’t cost us anything.
What these intangible offer components do, is to signal that the negotiation of the financial part is genuinely exhausted and you will not budge on price anymore. You are steering the conversation away from discussing the price.
This simple method works on a number of levels:
- Because you have several clear steps in your mind, you can play on the human norm of reciprocity. Each time you give something, your counterpart will feel obliged to also give in a bit.
- The diminishing size of the increases will convince your counterpart that they have squeezed you to your breaking point. They will think that you are, indeed, about to walk away.
- Non-round numbers have a psychological power of their own. Exact numbers also indicate that this is genuinely the last offer. Did you wonder why the hostage ransom I mentioned above was $4,751 rather than $4,750? Exactly!
There are plenty of practical, easy negotiating tactics you can teach yourself.
Another one of my personal favourites is never to be the actual decision-maker. I often make it clear in negotiations that I can’t make the final decision and need to check with the real decision-maker. This gives me time to think about how I might be able to push my counterpart further into my direction.
If you are CEO of an organisation, just say you have to check with your board of directors. If you use this technique in the right way, it might save you so much money that it pays for your annual costs of the board of directors in a single transaction (and then some). On another occasion of negotiating a potential sale of precious gems, I said that I was selling them on behalf of my mother and had to check any decision with her. There are endless possibilities!
Having done a fair amount of reading on the subject, I now have a list of about 20 tools that I personally like, which I have practised, and which suit the general sort of situation I regularly find myself in.
Meeting in the middle isn’t something I would do anymore nowadays, and having the skills needed to avoid going down that route has proven really valuable!
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2. Develop the negotiating mindset
The examples I mentioned above touched on a critical point. A lot of the issue of negotiating boils down to using human psychology and hitting the other person’s buttons.
Put another way, you could easily see negotiating as being really manipulative, or even mean.
The truth is, all negotiating – however crudely done – is defined by the subterranean network of human psychology. All social interaction is based on how we are wired.
You’ll have to accept that if you don’t develop the necessary understanding and skills in negotiating, someone else will use it against you. It’s as simple as that.
Using these skills is legitimate and powerful. In the future, you’ll either stand on the side of those who are good at using them to defend your position and to get what you want, or you aren’t.
Once you have realised this, you should start learning about and exploiting every single facet that there is to the process. Be entirely unapologetic about it.
3. Choose to learn “restaurant Italian” or become a native speaker
There is nothing wrong with picking up just a handful of foreign sentences so that you can navigate restaurants, bars, and tour operators whenever you visit a different country. Depending on what you aim to achieve, this could be all that you’ll ever need to learn about this particular language. Doing as little as picking up restaurant Italian will already make your visit to Bella Italia more pleasant.
If you feel that picking up half a dozen (or 10, or 20) of my quick-win, simple tactics is sufficient, then do that and leave it there. You won’t have to invest much time doing so, and it’ll already improve your results in life.
If, on the other hand, you feel that true hard-ass bargaining tactics will be crucial for your future life, career and business management, then you should start to look at negotiating as a skill that is very much like learning an entirely new language. Because, quite frankly, it is.
There is an entire body of knowledge about how to use words and even non-verbal factors in negotiations:
- In what sort of questions and situations should you avoid the words “can,” “is,” “are,” “do” or “does”?
- What are your counterpart’s likely reactions when you use the words “who,” “what,” “when,” “where” and “why” in questions?
- What is the cultural norm that often (but not always) leads to the word “why” backfiring on you when using it in a negotiation?
- Only 7% of communication is verbal, but 38% comes from the tone of voice and 55% from body language. How do you account for that in your negotiating style?
- How to use deadlines as part of your negotiating tactic, and how to decide if deadlines should be used at all?
- In a world where the word “Yes” is what everyone aspires to (“Can I get five minutes of your time to explain our new mobile phone data package to you?”), how can you use the word “No” as a negotiating tool that surprises and overwhelms your counterpart?
Knowing about these complex causal relationships is not enough. Getting the practice necessary to use all this knowledge correctly is a whole different ballgame.
By now, I have seen some incredibly good negotiators at their game, and I have been in training sessions for negotiating tactics. These were very powerful experiences. It makes you realise what a level of depth there is to the subject, and how powerful it is when applied. It also makes you realise that 99% of the population have no idea about any of this, which is why “Meet in the middle” is still the norm for so many.
Nothing sums it up quite like calling it another language you can learn.
Do you speak ‘negotiating‘?
Like with any other language, if you want to go down that route, you should be prepared to embark on a multi-year journey. You’ll never be done because there’ll always be more to learn. But it’ll also be fun! You’ll become better and better at being eloquent in negotiating conversations, and you’ll get more of what you want in life.
It also makes you realise that 99% of the population have no idea about any of this, which is why “Meet in the middle” is still the norm for so many.
Just don’t fall for any promises to teach you all this in the time required to read one blog article. “Read this article to become a master negotiator – now” isn’t going to deliver the whole set of advantages to you. A careful, diligent study of the subject will do it, though, and our generation is lucky enough to have all the resources available to it; much of it even for free.
What is the best approach for you?
To define which and how many negotiating skills you should pick up, it’s best if you first determine what you are aiming for.
Are you likely to only ever really need tough negotiating skills every few years when you negotiate for a new job? Negotiating for a salary is a specific set of negotiating skills, and you can make a focussed effort to pick them up.
Does your work involve a lot of selling, and do you regularly have to negotiate prices, packages, and long-term deals? Again, knowing that you will need negotiating skills for such a clearly defined task will help you to seek out the right resources that can teach you specific negotiating skills for these areas.
If you are an entrepreneur who is building and running a business, you’ll need an extensive set of negotiating skills. You’ll negotiate salaries with your staff, transactions with your clients, funding agreements with your shareholders. For entrepreneurs, it’s best to take a very broad approach to negotiating, while breaking it down into smaller sections to make it easier to acquire these skills.
What is hopefully entirely clear to you by now, is that if you want to take your career, your business or your life in general to a higher level of success, you’ll need to develop negotiating skills. Looked at it from another perspective, whenever you will find yourself in a situation where your counterpart has more practice at negotiating than you, you’ll see progress in your life getting hampered.
Nothing will stop you from becoming a master negotiator over time
If you’ve never considered yourself a born negotiator, I hope you now realise that this is a skill you can pick up and improve over time. It’s not rocket science, nor is it magic. There are even quite a few tricks and tools you can pick up very quickly. Everything else about it is reading, practising, and gradually building a skill set.
It’s ultimately also about having a civilised conversation with whoever it is that you need to be negotiating with. Manipulative it may be if that’s how you wanted to look at it. But it’s also about creating the framework for a pleasant human interaction. There is a particular art to creating the right set of circumstances that leads to a win-win for both parties. Yet another way of looking at negotiating, it’s a bit like a dance.
If you’ve never considered yourself a born negotiator, I hope you now realise that this is a skill you can pick up and improve over time.
Would you like to read more about this?
My favourite book about this subject – so far – has been “Never split the difference,” by Chris Voss, the FBI’s former chief negotiator. Like any other book about the subject, it only covers parts of it and from one particular angle, but I found it particularly helpful and inspiring. It was this particular book that I lifted the aide-memoire example from, and a few other bits and pieces of this article.
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