How to Negotiate Effectively

Wall Street, New York, USA

Unfortunately, there aren’t too many English books to choose from in Guatemala. Paired with my pickiness in reading only the best of the best books, you’ll have to cope with my forthcoming book reviews. (I’m thinking my next purchase is going to be an old Critical Thinking textbook, haha).

With that said, I don’t want it to take away from the book I recently read, entitled Give and Take by Chester Karrass. In effect, it’s actually not a book but rather a sort of encyclopedia that ranges topics from A-to-Z or more specifically from Acceptance Time (people need time to accept anything foreign or unpleasant) to Zeroing In (techniques to find out what price the other party is willing to settle on).

As someone who is generally weak when it comes to negotiation as well as my impending aspirations to become a leader in the field of business, my choice of book could have been a lot worse (I’m looking at you Bill Clinton’s autobiography!) Following is a list of the top concepts and strategies from the book that I think anyone, business-inspired or not, could use in trying to improve the outcome of their next negotiation, whether that be for rent, salary, or other.


Aspiration Level:

Experiments confirmed that people who set higher targets and commit themselves to them will do better than those willing to settle for less.

Lesson: Go big or go home baby!

Averages are Always Negotiable:

List prices are negotiable. Why? Because they represent averages. They were designed to fit the average customer at some average period of time. You are you. You are not average. Take it from there.

Lesson: Ask whether the average (and that’s what it is) should really apply to your situation.

The Ideal Pattern of Concessions:

1. Buyers who started with low offers did better than those who didn’t.

2. Sellers who were willing to take less got less.

3. People who gave just a little at a time did better.

4. Quick negotiations were very bad for one party or the other.

Iceberg Theory: When a Little Means a Lot:

Most of us try to appear as attractive as we can, but we only get to see the tip of an iceberg of who they actually are (with the bulk of their personality unseen).

Lesson: If, with all of their efforts to look good, the tip shows flaws, one can only assume that the bottom is worse.

The Ideal Negotiator: Most Important Traits

> A willingness and commitment to plan carefully.

> The courage to commit oneself to higher targets and take the risks that go with it.

> The wisdom to be patient and thereby to wait for the story to unfold.

> A commitment to integrity and mutual satisfaction

> An ability to listen open-mindedly

> A stable person; one who has learned to negotiate with himself and laugh a little. One who doesn’t have too strong a need to be liked because he likes himself.

Make Him an Offer He Must Refuse:

Why? To help zero in on what he will accept. The magic is that it opens up a flow of conversation. When people believe that no deal is likely, they talk candidly with one another. It is then that real motivations and goals are revealed. There is no reason why a man cannot then follow up with bargaining in good faith.

Patience

This is the most powerful tactic in negotiation. It takes time to understand issues, weigh risks, test the opponent’s strength, know what he wants and change his expectations.

Lesson: Prepare for a slow negotiation. Know that patience is the only way to get his viewpoint, the only way to understand the price.

Advice in Asking Questions:

> Get your questions ready in advance.

> Have the courage to ask questions that pry into the other person’s affairs.

> Have the courage to ask what may appear to be dumb questions.

> Shut up after you raise a question.

> Be persistent in following up your question if the answer is evasive or poor.

Rate of Concession:

Experiments demonstrated that successful bargainers made consistently smaller concessions than their opponents. They were less generous and less predictable.

Lesson: If you’re buying, start low and give in very slowly over a long period of time. If you’re selling, start high and give in very slowly over a long period of time.

Status:

Status differences affect the way people act and make decisions. Take on men of higher status in a man-to-man, issue-by-issue basis.

Lesson: The better you prepare, the more knowledgeable you are, the less does status matter. Don’t be intimidated.


I know what you’re thinking. These suggestions are 100% focused on the Fortune 500 corporate executive who deals with big time deals on the reg, and I’m not going to lie to you: they are. But that doesn’t mean we can’t learn immensely from the lessons in front of us.

I for one want to learn from the experts so that the next time I’m asking for cheaper rent, selling something on Craigslist, or just swapping something among friends, I’ll be in a much stronger position to not be taken advantage of.

I want to never be on the losing side of negotiation ever again. Implementing this advice into my future conversations will undoubtedly help me achieve that goal.


If you liked this post, check out more here!

One clap, two clap, three clap, forty?

By clapping more or less, you can signal to us which stories really stand out.