Over the course of my career, I’ve made successful deals for clients ranging from Fortune 500 companies to police departments facing racial conflicts. I’ve negotiated more than a billion dollars worth of contracts for professional athletes. But I never burned bridges nor sacrificed my integrity. In fact, being nice helped me achieve more of my goals and build relationships with less stress and greater returns.
MY “WIN/win” STRATEGY
It’s common to think of negotiation as a onetime, “zero-sum event” — with the goal being I win, you lose. But most “deals” in your professional and personal lives are really daily, monthly or yearly pieces of larger or ongoing deals. If you have an annual family tussle over where and how to spend the holidays, you know what I mean.
Better: Instead of trying to dominate the other person in a negotiation, make the best deal you can for yourself by helping him/her get what he wants. I call this a WIN for you, a win for him.
Example: You go to your local electronics store to purchase a certain DVD player. You don’t want to spend more than $150, but the salesman refuses to accept less than $200. At this point, many buyers will walk out, threatening to never shop there again… cave in and spend the extra money… or buy a different brand that they don’t like as much. Instead, you notice a floor model on display. You offer the salesman $125 for the floor model, but to protect yourself, you ask him to give you the $99, three-year extended warranty for just $25. He agrees.
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Result: You walk away with your DVD player at your price without being a pushover. And, the deal is acceptable to the salesman because you helped him get what he wanted — a sale.
CREATING A WIN/win NEGOTIATION
Before the negotiation…
Identify what you really want. Example: You decide to sell your house and relocate. You spend months in fruitless negotiations with buyers because you refuse to budge on your price, which is the same amount your neighbor down the street sold his house for.
Better: Realize that what you really want is to make enough money to meet your financial goals and buy your next house on your timetable, regardless of whether your sale price is the highest in the neighborhood.
Weigh the alternatives. If you realize there are several possible solutions that can satisfy you, you’ll be less dependent on one kind of outcome. For example, back in the electronics store, what would have happened if the salesman had refused your offer to buy the floor model of the DVD player? If you had considered that possibility beforehand, you could have brought along enough money to offer cash for it — which would let the store avoid paying a fee for accepting your credit card payment.
Know your walk-away number. Figure out at what point the only satisfying outcome is not to do any deal at all. Face this tough question in advance — otherwise you risk becoming emotionally involved during negotiations and lowering your expectations as the deal progresses.
During the negotiation…
Build a relationship — even if short-term. Look for common ground (for example, “Do you live in the area too?”… “My friend thinks highly of your work”). This builds trust and encourages the other person to believe that you won’t ignore his needs.
Find out what the other side wants. The more information you have about the other party’s expectations, the easier it is to come up with solutions for a mutually satisfying deal. Effective techniques…
Ask the other party lots of questions, the same ones you asked yourself beforehand. Ask him about his ideal outcome. What alternatives to his ideal outcome might be acceptable? What’s his walk-away number? He may not tell you, but it doesn’t hurt to ask.
Ask the person to restate what he just said. It’s amazing how often the restatement turns out to be different from the original. People tend to explain more each time they state their positions, to give more details, to soften their stances and even offer options to what previously seemed like a hard line.
Phrase potentially confrontational questions and statements neutrally. Ask, “Aren’t you charging me more than we agreed?,” not “You’re ripping me off, aren’t you?” Speak hypothetically to soften your suggestions. Use phrases like “Just suppose… “
Making an offer…
Let the other person speak first. This works best in price negotiations where you know the other person has a range of prices he may agree to, such as in a salary negotiation.
Reason: If you make the initial offer, you might be setting your sights too low. Even if the offer you get is far less advantageous than you hoped for, you now have a minimum on which to build.
Never make an offer without knowing where you’re willing to go next. If you know where and what you can concede, you’ll never feel like you were ripped off. The deals you make will feel satisfying because they fall within the parameters of your plan.
If negotiations reach an impasse or turn negative…
Use the “finger-on-the-lips” move. If I feel that I’m about to blurt out words that I’ll regret, I put my finger up to my mouth. To anyone else, it just looks like I’m thinking. I follow that action with some deep breaths. Then I switch the tape in my head from an insecure voice to one that is pumping positive mantras, such as, “I can handle this. I’m not going to take it personally.”
Ask, “What would you do if you were on my side of the table?” Getting the other party to see things through your eyes can help lift him out of an entrenched position. Hint: If the other party responds, “If I were you, I’d take the deal I’m offering,” probe further. Ask, “How do you think that would benefit me? “
Change environments. Sometimes moving to a different location can break negative momentum and create a new atmosphere for the negotiations.
Example: Several years ago, I was negotiating a deal for Cal Ripken, Jr., the soon-to-be Hall-of-Fame baseball player, with his team, the Baltimore Orioles. The Orioles owner proposed a salary of $20 million over four years — what top shortstops were earning. We wanted a five-year deal worth almost $50 million, on par with the top players regardless of position. The team owner and I were deadlocked, $30 million apart, so I moved the negotiations from my Baltimore offices to my farm in Butler, Maryland. The fresh air and laid-back environment allowed each side to confess its real needs and pave the way for a deal. Upshot: We reached a five-year, $32.5 million deal in which the Orioles agreed to provide post-career compensation guarantees, which added dollars to the overall contract but did not raise Ripken’s pay for active years.
Everyone won. Cal got immediate and post-career security. The Orioles kept their Hall of Famer without having to make him the highest-paid player in baseball.
Best way to finish up after the deal is made…
Lay the groundwork for a continuing relationship. Compliment the other party, either in person or on the phone, on his negotiating skills that helped lead to a fair deal for both of you. For instance, over the course of my career, I’ve gone on to represent many ballplayers in negotiation with the Baltimore Orioles, including three other Hall of Famers.