10 Ways to Lose a Negotiation – May 2010 Master Negotiator

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“Your ability to negotiate, communicate, influence, and persuade others to do things is absolutely indispensable to everything you accomplish in life.”

-Brian Tracy

Recently, a seminar participant came up to us during a break and said, “I think I made a huge mistake in a recent negotiation regarding budgets.” The participant went on to add that she did not counter her CFO’s original budget number for her department. What gave her the feeling of buyer’s remorse is that two of her peers had each countered the original budget figure offered by the CFO and through negotiation, had their budgets increased.

Hind sight being 20/20, it is hard to say whether it was a mistake or if the participant received a great deal on her final budget. What we do know is that specific skills, when practiced, lead to better negotiated outcomes. Please feel free to contact us with any negotiation questions or article ideas. We’ll do our best to address them in upcoming issues. (peter@peterstark.com)

Remember, almost everything in life is negotiable.

Peter B. Stark & Jane Flaherty

Not satisfied with your negotiation outcomes, but not sure what is causing the problems? If you feel you are continually striking out, it’s time to reassess your approach and see if you are hurting your negotiation more than helping it.

Below, find the top ten ways to lose a negotiation.

1. Be Pessimistic

   In every negotiation, counterparts have one of three visions of the outcome. The third type of vision is a negative one. These negotiators know they are going to lose the negotiation before they ever begin the process. The second type of vision is to obtain the status quo. You are not trying to win or lose anything: you are just trying to keep what you have already achieved.

   Vision number one, which is where you need to be if you want a win-win outcome, is a compelling, positive vision. This counterpart sees himself as successfully negotiating with their counterpart and achieving his goals. Great negotiators have a positive vision of the outcome and plan a strategy to turn the vision into a reality.

2. Don’t Worry About Preparation

   Many negotiators prepare on the way to the negotiation. Or better yet, they use their first meeting with the counterpart to go in and determine the counterpart’s position. That’s great as long as the counterpart came into the negotiation with the same amount of preparation.

   The side who is the best prepared, usually receives the best outcome. If the counterpart spent a few hours of preparation to research you, your customers and your competitors, and you didn’t research them, you are going to be at an unfair advantage. It is amazing that in the age of the Internet, some people don’t even go to the web to do five minutes of research prior to the negotiation. Like we learned in school, doing your homework will almost always help you to be even more successful in your outcomes.

3. Lower your Aspirations

   If you don’t expect much from the negotiation, you’ll always be pleasantly surprised by the outcome, right? Wrong!

   Good preparation goes hand in hand with high aspirations. When you go into a negotiation, you need to identify three points of information. First, you need to clearly articulate your goal. If the new software is quoted at $5,000, then what is your goal for the final price? If your goal is to pay less than $5,000, then you can never open up the negotiation at $5,000. You need to identify your second important piece of information which is your wish. To get a really great deal, your wish would be to buy the software for $4,000. The reason you need to establish a wish to open your negotiation at is that if you start the negotiation at $5,000, your goal, then you will always be negotiating on the wrong side of the fence. When you start the negotiation at $5,000, you are most likely going to end up higher than your $5,000 goal. But if you start at $4,000, your wish, there is a good chance you will end up somewhere between $4,000 and $5,000. Last, you need to identify your bottom line. If this software rises above $5,000 with add-ons, at what price are you willing to walk away from the table and go seek competitive bids? When you raise your aspirations by opening up your negotiation at your wish, you almost always achieve a better outcome.

4. Never Compromise

   If you don’t compromise on anything, you can be sure that your counterpart will not want to negotiate with you again.

   Always compromise, except when it comes to core values. The core value may be quality, profitability or fidelity. When it comes to core values, negotiating becomes a slippery slope that usually becomes a lose-lose outcome. If the deal point is not a core value, we have found, in most instances, that it is beneficial to compromise and achieve a win-win outcome. Could you have done better? You can always do better. But, if you consider what your time is worth and more importantly, how you enjoy spending your time, the right decision is usually to compromise.

5. Say “Yes” to the First Offer

   When you say “yes” to a counterpart’s first offer, you statistically increase the chances of undermining the deal.

   Don’t ever say “yes” to a counterpart’s first offer. People expect you to counter their first offer. Don’t disappoint them. Think about it. Someone is selling their car for $10,000. You offer them $5,000 and they extend their hand and tell you, “sold.” There would be two thoughts racing through your mind. The first thought would be, “I should have offered $4,000.” The second thought would be, “Something is wrong with this car.” Neither of these thoughts are motivators to encourage you to move forward with the deal.

   If your counterpart offers you the perfect price, then counter with another deal point like timing or a condition of sale. For example, on the car deal above, you could say, “I could accept the $5,000 but only under one condition: that you pay me today all in cash.” Always counter.

6. Don’t Walk Away

   We are fond of saying: some of the very best deals we have ever negotiated are the ones we did not.

   Sometimes, the best deal you can make is to walk away. When you walk away, it is important to remember you are not creating a lose-lose or win-lose outcome, you are creating a “no outcome.” No outcome is very different than a lose-lose outcome. Most people have had the experience of walking out of a car dealership without making a purchase. In this example, you most likely will end up buying the car from the same dealership on a different day or you will buy it from a different dealership. The original dealership is either going to sell the car to you on a different day or they will sell it to someone else. On the day you walked out, no one lost. There just was no outcome in the deal.

7. Talk More than Listen

   The old cliché is right. You’ve got two ears and one mouth and, in a negotiation, it is advisable to use those parts in direct proportion.

   The best negotiators are great listeners. By being a great listener, you are showing your counterpart that you value them and their opinion. When people feel valued, they are much more likely to concede and work toward a win-win outcome. When great listeners do speak in a negotiation, they usually practice the art of asking great questions, which facilitates even more listening.

8. Forget About Multiple Options

   In a negotiation, when you do not have multiple options, you tend to throw your anchor over the side of the boat without a line attached.

   When you develop multiple options so that you can pull up your anchor and try a different strategy or tactic, you will become a resourceful negotiator. If each counterpart has three different options of how they can successfully achieve their goal, almost always, a win-win outcome can be achieved.

9. Don’t Find Out the Needs and Goals of your Counterpart

   If you don’t know the needs of your counterpart, you will be unable to reach a win-win outcome.

   While communicating, pay attention to clues that your counterpart drops about their needs. In every negotiation, there are two types of needs operating. Your counterpart will always tell you their explicit needs, which are things like: price, quantity, delivery, warranty, terms, etc. However, they will never tell you their implicit needs, such as: looking good in the eyes of their boss, being liked, being right and feeling valued. Great negotiators know that it is the implicit needs, not the explicit needs, which drive the outcome of a negotiation. Help your counterpart meet their implicit needs and you will find it even easier to achieve a win-win outcome.

10. Only Use One Strategy

    What if the one strategy you have fails? The negotiation will not end well.

    Great negotiators continually build their repertoire of strategies and tactics. The average person uses three to five strategies or tactics that they have mastered from using over and over. Sharks or bullies usually have less than three strategies and/or tactics. They need fewer tactics because the ones they do use, like yelling or swearing, work so well. In our best-selling book, The Only Negotiating Guide You’ll Ever Need, we review 101 different strategies and tactics you can use, and how to counter if someone ever used the tactic against you. To help you build your skills, you can also sign up for our free Negotiation Tactic of the Week newsletter. Start putting a few new strategies into play and have fun as you observe the results.

There you have it. The top ten ways to lose a negotiation. In your next negotiation, pull out this list and put a check by each one as you ensure that mistake is not going to derail your ability to successfully achieve your negotiated goal.