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Strategies
Negotiation can take a wide variety of forms, from a trained negotiator acting on behalf of a particular organization or position in a formal setting, to an informal negotiation between friends. Negotiation can be contrasted with mediation, where a neutral third party listens to each side's arguments and attempts to help craft an agreement between the parties. It can also be compared with arbitration, which resembles a legal proceeding. In arbitration, both sides make an argument as to the merits of their case and the arbitrator decides the outcome. This negotiation is also sometimes called positional or hard-bargaining negotiation.
Negotiation theorists generally distinguish between two types of negotiation. Different theorists use different labels for the two general types and distinguish them in different ways.
Distributive negotiation
Distributive negotiation is also sometimes called positional or hard-bargaining negotiation. It tends to approach negotiation on the model of haggling in a market. In a distributive negotiation, each side often adopts an extreme position, knowing that it will not be accepted, and then employs a combination of guile, bluffing, and brinkmanship in order to cede as little as possible before reaching a deal. Distributive bargainers conceive of negotiation as a process of distributing a fixed amount of value.
The term distributive implies that there is a finite amount of the thing being distributed or divided among the people involved. Sometimes this type of negotiation is referred to as the distribution of a "fixed pie." There is only so much to go around, but the proportion to be distributed is variable. Distributive negotiation is also sometimes called win-lose because of the assumption that one person's gain results in another person's loss. A distributive negotiation often involves people who have never had a previous interactive relationship, nor are they likely to do so again in the near future. Simple everyday examples would be buying a car or a house.
Integrative negotiation
Integrative negotiation is also sometimes called interest-based or principled negotiation. It is a set of techniques that attempts to improve the quality and likelihood of negotiated agreement by providing an alternative to traditional distributive negotiation techniques. While distributive negotiation assumes there is a fixed amount of value (a "fixed pie") to be divided between the parties, integrative negotiation often attempts to create value in the course of the negotiation ("expand the pie"). It focuses on the underlying interests of the parties rather than their arbitrary starting positions, approaches negotiation as a shared problem rather than a personalized battle, and insists upon adherence to objective, principled criteria as the basis for agreement.
Integrative negotiation often involves a higher degree of trust and the forming of a relationship. It can also involve creative problem-solving that aims to achieve mutual gains. It is also sometimes called win-win negotiation.
Tactics
There are many different ways to categorize the essential elements of negotiation.
One view of negotiation involves three basic elements: process, behavior and substance. The process refers to how the parties negotiate: the context of the negotiations, the parties to the negotiations, the tactics used by the parties, and the sequence and stages in which all of these play out. Behavior refers to the relationships among these parties, the communication between them and the styles they adopt. The substance refers to what the parties negotiate over: the agenda, the issues (positions and - more helpfully - interests), the options, and the agreement(s) reached at the end.
Another view of negotiation comprises four elements: strategy, process, tools, and tactics. Strategy comprises the top level goals - typically including relationship and the final outcome. Processes and tools include the steps that will be followed and the roles taken in both preparing for and negotiating with the other parties. Tactics include more detailed statements and actions and responses to others' statements and actions. Some add to this persuasion and influence, asserting that these have become integral to modern day negotiation success, and so should not be omitted.
Adversary or partner
The two basically different approaches to negotiating will require different tactics. In the distributive approach each negotiator is battling for the largest possible piece of the pie, so it may be quite appropriate - within certain limits - to regard the other side more as an adversary than a partner and to take a somewhat harder line. This would however be less appropriate if the idea were to hammer out an arrangement that is in the best interest of both sides. A good agreement is not one with maximum gain, but optimum gain. This does not by any means suggest that we should give up our own advantage for nothing. But a cooperative attitude will regularly pay dividends. What is gained is not at the expense of the other, but with him.
Employing an advocate
A skilled negotiator may serve as an advocate for one party to the negotiation. The advocate attempts to obtain the most favorable outcomes possible for that party. In this process the negotiator attempts to determine the minimum outcome(s) the other party is (or parties are) willing to accept, then adjusts their demands accordingly. A "successful" negotiation in the advocacy approach is when the negotiator is able to obtain all or most of the outcomes their party desires, but without driving the other party to permanently break off negotiations, unless the best alternative to a negotiated agreement (BATNA) is acceptable.
Skilled negotiators may use a variety of tactics ranging from negotiation hypnosis,[citation needed] to a straightforward presentation of demands or setting of preconditions, to more deceptive approaches such as cherry picking. Intimidation and salami tactics may also play a part in swaying the outcome of negotiations.[citation needed]
Another negotiation tactic is bad guy/good guy. Bad guy/good guy is when one negotiator acts as a bad guy by using anger and threats. The other negotiator acts as a good guy by being considerate and understanding. The good guy blames the bad guy for all the difficulties while trying to get concessions and agreement from the opponent.
Perspective taking for integrative negotiation
Perspective taking can be helpful for two reasons: that it can help self-centered negotiators to seek mutually beneficial solutions, and it increases the likelihood of logrolling (when a favor is traded for another i.e. quid pro quo). Social motivation can increase the chances of a party conceding to a negotiation. While concession is mandatory for negotiations, research shows that people who concede more quickly, are less likely to explore all integrative and mutually beneficial solutions. Therefore conceding reduces the chance of an integrative negotiation.
Negotiation styles
Kenneth W. Thomas identified5 styles/responses to negotiation. These five strategies have been frequently described in the literature and are based on the dual-concern model.The dual concern model of conflict resolution is a perspective that assumes individuals' preferred method of dealing with conflict is based on two themes or dimensions
A concern for self (i.e. assertiveness), and
A concern for others (i.e. empathy).
Based on this model, individuals balance the concern for personal needs and interests with the needs and interests of others. The following five styles can be used based on individuals’ preferences depending on their pro-self or pro-social goals.These styles can change over time, and individuals can have strong dispositions towards numerous styles.1. Accommodating: Individuals who enjoy solving the other party's problems and preserving personal relationships. Accommodators are sensitive to the emotional states, body language, and verbal signals of the other parties. They can, however, feel taken advantage of in situations when the other party places little emphasis on the relationship.2. Avoiding: Individuals who do not like to negotiate and don't do it unless warranted. When negotiating, avoiders tend to defer and dodge the confrontational aspects of negotiating; however, they may be perceived as tactful and diplomatic.3. Collaborating: Individuals who enjoy negotiations that involve solving tough problems in creative ways. Collaborators are good at using negotiations to understand the concerns and interests of the other parties. They can, however, create problems by transforming simple situations into more complex ones.4. Competing: Individuals who enjoy negotiations because they present an opportunity to win something. Competitive negotiators have strong instincts for all aspects of negotiating and are often strategic. Because their style can dominate the bargaining process, competitive negotiators often neglect the importance of relationships.5. Compromising: Individuals who are eager to close the deal by doing what is fair and equal for all parties involved in the negotiation. Compromisers can be useful when there is limited time to complete the deal; however, compromisers often unnecessarily rush the negotiation process and make concessions too quickly
I agree with the experts answers. Thank you
Tactic #1: The Wince
The wince can be explained as any overt negative reaction to someone’s offer. For example, you might act stunned or surprised when your negotiating counterpart names their terms. This tactic tells your counterpart that you know your limits, which isn’t under-handed or dishonest. And wincing at the right time can potentially save you thousands of dollars. Keep in mind that when deals are negotiable, your counterpart will start high.
Of course, you won’t always be the wincer. Many times, especially in the sales profession, you’ll be on the receiving end of the wince. In this case, you can counter with the next tactic.
Tactic #2: Silence
In the negotiation process, silence can be your strongest tool. If you don’t like what your counterpart has said, or if you’ve made an offer and you’re waiting for a response, just sit back and wait. Most people feel uncomfortable when conversation ceases, and they start talking automatically to fill the void. Almost without fail, your counterpart will start whittling away his or her position when you use this tactic.
So what if you find yourself negotiating with a person who understands the importance of silence as well as you? Rather than wasting time in silence, restate your offer. Don’t make suggestions; just repeat your terms. This maneuver forces the other person to respond, and more often than not, they respond with a concession.
Tactic #3: The Good Guy/Bad Guy Routine
This sleazy tactic is often used in movies, where two detectives are interrogating a person who’s just been arrested. One detective seems unreasonable and inflexible, while the other tries to make it look like he or she is on the suspect’s side. This tactic is designed to get you to make concessions without the other side making any in return.
If you find yourself in a good guy/bad guy situation, the best response is to ignore it. Recognize this game for what it is, but don’t play along and don’t allow the good guy to influence your decision. The best technique is to let your counterparts play their game, while you watch out for your own interests.
Tactic #4: Limited Authority
This tactic is a variation on the good guy/bad guy routine, but instead of two people working over you, the one person you’re dealing with tells you that he or she must approve any deals with an unseen higher authority. Sometimes, this higher authority exists, but other times your counterpart will create this figure to gain an edge in the negotiation process.
So just because your counterpart tells you, “It’s out of my hands,” don’t automatically assume the person is being honest. In this type of situation, two options exist: one, ask to deal directly with this so-called higher authority; or two, test the limits of your counterpart. You may find that although the other person has used this tactic to force you into backing down, if you keep at him or her, you may get what you want.
Tactic #5: The Red Herring
This technique comes from fox hunting competitions, where one team drags a dead fish across the fox’s path to distract the other team’s dogs. At the bargaining table, a red herring means one side brings up a minor point to distract the other side from the main issue. Effective and ethical negotiators generally agree that this tactic is the sleaziest of them all.
When your negotiation process is bogged down with a minor problem, and your counterpart insists on settling it before they’ll even talk about more important issues, then you are probably dealing with a red herring. In this case, use extreme caution, and suggest setting the issue aside temporarily to work out other details.
Tactic #6: The Trial Balloon
Trial balloons are questions designed to assess your negotiating counterpart’s position without giving any clues about your plans. For example, you may ask your counterpart, “Would you consider trying our services on a temporary basis?” or “Have you considered our other service plans?” Essentially, these types of questions put the ball in your counterpart’s court, and the nice part about them is they aren’t really offers. They allow you to gain information without making a commitment.
When you’re on the receiving end of a trial balloon question, you may feel compelled to answer it thoroughly. To maintain your edge, resist this temptation and counter with another question. For example, if someone asks, “Would you consider financing the house yourself?” respond, “Well, if I did, what would your offer be?”
Tactic #7: Low-Balling
Low-balling is the opposite of the trial balloon. Instead of tempting you to make the first offer, your counterpart will open the process with a fantastic offer. Then after you agree, they start hitting you with additional necessities.
For example, say you see an ad for a product priced lower than other stores. But then after you agree to buy, the sales representative uncovers the hidden costs, such as shipping or installation. In the end you probably pay more than you would have at another store listing a higher price on the product. To avoid falling victim to this tactic, ask your counterpart about additional costs before agreeing to any deal.
Tactic #8: The Bait-and-Switch
Similar to low-balling, the bait-and-switch tactic should be avoided. Your counterpart may try to attract your interests with one great offer, but then hook you with another mediocre one. This tactic will almost always burn you, unless you can recognize it. If your counterpart were really able to offer a genuinely good deal, they wouldn’t have to resort to bait-and-switch.
Tactic #9: Outrageous Behavior
Outrageous behavior can be categorized as any form of socially unacceptable conduct intended to force the other side to make a move, such as throwing a fit of anger or bursting into tears. As most people feel uncomfortable in these situations, they may reduce their negotiating terms just to avoid them.
However, the most effective response to outrageous behavior is none at all. Just wait for the fit to die down before reacting, because emotional negotiations can result in disaster.
Tactic #10: The Written Word
When terms of a deal are written out, they often seem non-negotiable. For example, when was the last time you negotiated a lease, or a loan, or even a service contract that was typed up in advance in an official-looking document? You probably assumed these deals were non-negotiable, and for some reason most people make the same mistake of accepting terms that appear in writing.
The best defense against this tactic is simply to question everything, whether it appears in writing or not. You’ll inevitably run into some standard, non-negotiable documents, but it never hurts to ask questions. You may be surprised how many contracts actually are negotiable when challenged.
Better Negotiations in the Future
People have used these ten negotiation tactics for years, but that doesn’t mean they are always fair. So before you rush into your next negotiation situation, make yourself aware of these tactics and how they affect the process. When you learn the uses and defenses of these negotiation techniques, you can reach more mutually beneficial agreements and win more sales on better terms
Here are the recommended best practices from Grant and Galinsky.
1. Share information.
We often approach negotiation being very guarded and wary of showing our cards. Yet, while we believe this is a smart approach, it has a negative impact on our outcomes and inhibits trust. As Grant points out, people tend to be matchers and “follow the norm of reciprocity, responding in kind to how we treat them.” If we want to be trusted, we must first offer it.
Studies have shown that revealing some information, even when it’s unrelated to the negotiation, increases the outcome. You don’t have to put all of your cards on the table at the outset. Simply putting something of yourself out there – your hobbies, personal concerns, or hopes – can set a positive tone that’s conducive to gaining agreement.
2. Rank order your priorities.
Typically when we negotiate, we know what our key issues are, and we sequence them. For example, if we’re trying to close a new client, we might say that the price is most important, and if we don’t agree, there’s no use to continue.
Grant recommends another approach called rank ordering. His research shows that you are able to achieve better outcomes by ranking and leaving all the issues on the table and being transparent about it. That way both parties can compare their rankings and determine what the full set of options really are.
In the above example, perhaps you could make trade-offs in scope or travel requirements if the client can’t get to your price.
3. Go in knowing your target price and your walkaway terms.
Galinsky calls your walkaway price (or terms) your reservation price. Your target price is what you’re hoping for. Often we go into negotiations with one or the other – or let our partner start the bidding. This puts us at a huge disadvantage.
It’s critical to do the research ahead of time here. You need your research to be based on firm data, as not only will it provide more confidence and power to you, but it also reduces the chance that you’ll throw something crazy out there. By knowing your own range, it will help you make better decisions in the moment, and be clear about your limits.
4. Make the first offer.
This is one piece of advice that clearly defies conventional wisdom. In negotiations, information is often equated with power. We believe it’s best to extract as much as possible from the other person before tipping our own hand.
Grant and Galinsky both agree that the research is clear on this point: people who make first offers get better terms that are closer to their target price. The reason is the psychological principle of anchoring. Whatever the first number is on the table, both parties begin to work around it. It sets the stage.
Often we are reluctant to go first because we may be way off, and disengage the other party. But Galinksy notes that this does not play out in the research. He said that most people make first offers that aren’t aggressive enough.
There’s a reason we have the adage, “you get what you pay for.” Higher prices make the buyer focus on the positives, while lower ones invite focus on the downsides. In other words, we find data that supports this anchor. (Consider real estate: a high-priced home makes us look at all the desirable qualities, while a below-market offering brings up a bad location or needed repairs.)
Galinsky says that ideally the best first offer is one that’s just outside your partner’s reservation price, but not so far that they have sticker shock.
5. Don’t counter too low.
If you aren’t able to make the first offer, then you need to also protect yourself against the anchoring effect. Caution: most people go too low, too quickly. Your counter should be based on the same information you would have used if you’d made the first offer, Galinsky says.
You may also want to consider re-anchoring, as Grant puts it. Let the other person know that their offer is way off, and go back in with a new reset. It also may be helpful to call out what you’re observing to redirect the conversation, i.e. you may be trying to test my thinking with that first offer, but here’s more of what I had in mind.
6. Counter offers make both parties more satisfied.
Every buyer wants to feel that they got a good deal; every seller wants to feel as if they drove a hard bargain. Parties are most satisfied on both fronts if there was some back and forth. This may come as a surprise if you’re someone who abhors negotiation.
Galinsky even advises that you shouldn’t take the first offer, even if it meets your needs. By going back and asking for concessions you can ensure that you got the best deal, and increase your partner’s satisfaction as well. More satisfied partners are more likely to work harder and be more committed to the end result, which is the ideal outcome from the start.
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Thank You all very much for your participation, i agree with you sirs. Regards!
Negotiation Tactics That Get You The Best Deal
1. Share information.
2. Rank order your priorities.
3. Go in knowing your target price and your walkaway terms.
4. Make the first offer.
5. Don’t counter too low.
6. Counter offers make both parties more satisfied.
