The post below summarizes the book “The secrets of power negotiating and closing the deal”, by Roger Dawson

Negotiation Skills

1.1    The secrets of power negotiating and closing the deal, by Roger Dawson

Background on Roger Dawson

• One of America’s top negotiation expert
• Author of “The secrets of power negotiation”, largest selling business audio cassette program ever published with 28 million copies sold
• Author of 9 books, last 4 have been main selections of major book clubs
• Success Magazine “Premier Business Negotiator”
• Inducted in speaker hall of fame in 1991
• President of one of California’s largest real estate company

1.1.1     Introduction

• Options give u power. Convince customers of no options Negotiation of the return of democracy in Haiti.
• Negotiators deal with perception and not with reality
• Perception becomes reality
  • Gadaffi, Libya voluntarily gave up WMD program, believing US was prepared to attack Libya.
  •  Japan surrendered to US thinking they have more atomic bombs that they were willing to use
  •  Hostages being held in Beirut (one of them for 6.5 years). UN Secretary General got them out by downplaying the importance of the bargaining chip (we don’t care enough about the hostages to change our policy on hostage taking). Peggy her sister lead him to be the last person to be released
  • President carter did opposite when hostages were held in the Tehran embassy
• Key Takeaway: Downplay the importance of the negotiation chip. Take quarterly quota completion off the table during end of quarter discussions

1.1.2     Beginning Negotiation Gambits

1. Never Jump at the first proposal. It automatically triggers thoughts in the other persons mind (something’s wrong here, I could have done better). Always go through the process of negotiation. Extremely important to make sure that buyer feels that he won. Power Negotiator, achieves this
2. Ask for more than you can expect you can get (increases the perceived value of your product)
   1. Gives u room to negotiate
   2. You might just get it (You don’t know how the universe is aligned on that particular day)
   3. Creates a climate where the other side can win (They can negotiate with you and feel winners. Else there may be deadlock)
   4. Prevents deadlock when dealing with a egotistical person
3. Bracket your objective
   1. Opening position should be middle of what both parties want.
   2. RFP/RFI is a bad position for supplier. Creates perception of options for buyer & perceived competition. Price conscious buyer.
   3. Never give yourself the authority to propose numbers to the buyer. Vague authority behind  you
4. Flinch at their proposal
   1. They may not expect to get what they are asking for
   2. If you don’t flinch, they will think that they will get it
   3. Practice your flinches
5. Avoid confrontational negotiation
   1. Arguing always intensifies people’s desires to prove themselves right
   2. Counter with feel, felt, found formula. I understand how you feel, because other clients have felt the same way when they first saw the functionality. However, we have always found that the company will grow once they have the software. And you will need the functionality very soon.
6. Play Reluctant Buyer
   1. A very effective technique for squeezing the negotiating range(from wished price to the walk away price) before the negotiation even starts
   2. Look out for the Reluctant Seller
7. The Vise Gambit
   1. You’ll have to do better than this
   2. Exactly how much better than this do I have to do? Be quiet and shut up. (The silent close)

 

Important Takeaways:

• You never make money faster than during negotiation
• Negotiate in dollars not percentages

 

Things that affect the outcome of a negotiation

• Time pressure: Pareto’s 80-20 rule. Take time pressure off the table
• Information Power: People are reluctant to admit that they don’t know. That limits information gathering process. Accept the fact that you don’t know
  • The side with the most information usually comes out the winner
  • Don’t be afraid to ask questions (How much money did you make last year?)
  • Where you ask the question makes a difference (Take the buyer out for Golf)
  • Information is shared across peer group levels

1.1.3     Middle Negotiation Gambits

1. Maintain your resort to vague authority. Remove their resort to higher authority. Before taking out the proposal -Make a first pass – I don’t mean to put pressure on you (preparer), but if we are going to move on this, we will have to have to move really really fast. Could I just ask you this- If this proposal meets all your needs, is there any reason why you couldn’t make a decision right away?
   1. Counter Gambits if First pass doesn’t work

1.     Appeal to their ego. “But they always follow your recommendations, don’t they?”
2.     Get their commitment that they will recommend it to the committee. “You will recommend it, wont you?”

iii.    Qualified subject to close. “Why don’t we write out the paperwork, subject to.”

1. Never offer to split the difference. Encourage the other side to split the difference. You may be able to split it more than once.
2. The declining value of services. The value of a material thing can go up. The value of services always appears to go down rapidly. If u make a concession, get a reciprocal concession right away.
3. The Hot Potato.
   1. Don’t let other people toss you their problems. Find out the showstoppers immediately. Test for validity right away.
4. Trading off
   1. When asked for a small concession ask for something in return
   2. If we can do this for you, what can you do for us? (Elevating the value of the concession. It stops the grinding process. Reciprocal concession doesn’t have to be of equal value.)

1.1.4     Conflict Resolution (Angry person at hand)

1. Let them blow off steam. Art of conflict resolution deals with making people move off their positions that they have taken and focus back on their mutual interest. Cold War – (Soviet Union called a Evil Empire)
2. Seek Info. Find out all information about them. What they told you the problem might not be the real problem
3. Stage Three – Get them committed to a position. Reach for a compromise.

1.1.5     Ending Gambits

1. Good guy, Bad guy
   1. Counter by identifying the tactic. Oh come on, you aren’t going to play good bad, bad buy with me, are u?
2. The Nibble

1. Toward the end of the negotiation, the other side will agree to things which they wouldn’t agree earlier. Has got to do with the Psychology of decision making. The mind works to reinforce the decision made earlier. You fight the decision till you make it, but then it works to reinforce the decision once it is made.
2. Counter-tactic: Gently make the buyer feel cheap. Oh, come on, we put together for you. You know we can’t do that n keep on going?
3. Be Prepared to Walk Away
4. It’s the number one pressure point in any negotiation. Use bad guy, good guy in important situations. Walk away power comes from negotiations

4.Positioning for Easy Acceptance

1. Negotiations can deadlock at the last moment when the other person’s ego is at stake
2. Position for easy acceptance with a small concession made at the last moment.

 

Most powerful thought -> What can I give them that does not take away from my position