- Be prepared to walk away but …
- You might regret walking away! If you leave and then want to come back, you will have to compromise! This is as true for a car dealer as it as on Shark Tank! If you were offered a truly terrible deal, then chances are the other party will try to get you back to the table to make you a better offer. But if that doesn’t happen, you might as well kiss goodbye
- If your aren’t getting any closer to your ask, pretend that you are about to leave.
- Stand up.
- Start putting your stuff back into your bag.
- Wear your jacket
- Call someone and suggest to them you ‘may be done here’.
- If you are negotiating by email or phone, stop responding to emails and calls
- Don’t disclose your minimum acceptable
- Don’t disclose a competing offer. If you have a job offer for $X, never say you want at least $X or more than $X
- Create points for negotiation
- Don’t Bluff ! Chances are they will call your bluff. For example, don’t say a different dealer agreed to the price you are asking for. But see next point
- Have another offer at hand! This works great for cars and jobs! The offer must be less attractive than what you are asking for. Or it should have a twist. Examples I have used …
- Another dealer has offered you the car for the price you asked. But they don’t have the color you want. Be cautious because your dealer will say you have to pay more for the color you want
- I would like to buy it from you because I bought my last car from you and I had very good luck
- Know that everything is negotiable
- When negotiating contracts, don’t fall for these …
- That is standard language (Nothing is standard)
- Nobody ever had a problem with this. We have done this for 20 years
- We won’t enforce this noncompete (So they should be ok removing it ?!)
- This is the most we are authorized (They just told you theres a higher authority you can reach out to)
- (For Contracts) get as much email traffic as possible. Things people say in emails may hold up in court, even if the signed agreement is different. This is a double edged sword. Be careful. What you put in an email could be held against you
- Don’t offer replacement language for contracts in a email or text message or anything recorded or witnessed. No matter how smart you are, whatever you write will have a loophole. You may not realize that until after everything is signed and it is too late
- Never ask a YES / NO question. If you get the answer you don’t want, then you have just closed further discussion on the topic. On the flip side never answer a YES/NO question in a YES/NO manner. At best, a ‘maybe’ to shut up a persistent negotiator
Adapt Your Style
Negotiating with a CEO is very different from negotiating with a sales manager
You probably don’t want to counter every point a CEO makes. Pick your battles. CEO are more interested in the bigger picture and opportunities. They know how much you are worth. They are smart. Pick the high-ground. For example for a job, tell them how their compensation structure has to change to keep up with the googles and facebooks
Don’t become combative
Never engage in petty points with higher level individuals
Does he/she even understand ?
You are often negotiating with an intermediary of some kind. It may be a salesman or a recruiter or an intern or an assistant in the case of investors. They may not even understand the concepts in an agreement.
A recruiter may not know the difference between a non-compete and a non-disclosure agreement. Or the difference between a commuter expense reimbursement and pre-tax commuter deduction. Or the difference between relocation assistance and higher pay to compensate for cost-of-living
They tend to be combative themselves. If they, and only if they start, you could engage them on petty points. But never bicker. Use their petty arguments to your advantage. You can even give in to non-consequential points they make. The higher level negotiators will likely not ask you for things that aren’t important to you. They know what those things are either by experience or by probing indirectly or through cues. Then they incorporate those concessions into their deal as though they asked you and you agreed.
Many people, even the accomplished individuals often incorrectly assume whats important to you. Be alert for that, and correct it early on in the negotiations. If you don’t, they will make the wrong compromises, and get frustrated when they find out what actually is important to you. And they will blame you for ‘changing your mind’
Keep them engaged
A common mistake is to close a discussion when you are offered something below your minimum acceptable level. For example, a job offer that is less than what you make today. Do they think you are stupid enough to take less than what you make ? Probably not! They expect you to negotiate! They just gave you THE absolute minimum they will offer you!! They CAME TO THE TABLE. Thats half the battle, and you just won! Pick your next battle. Saying ‘that would never work’ when somebody makes an offer just shuts the door. Don’t SHUT doors, ever. If you don’t want to accept something, just go dark on them. There is no need to say no
Should you temporarily agree to something, and then back-peddle ? Wouldn’t you lose trust if you do that ?
What if you agreed to something, and later found they had a way around it ? Like Cramer says, ‘when the facts change, I change’. Or maybe you will make a bigger concession if the earlier concession is withdrawn
They may not move forward until you agree to some one point. If you don’t give in to that point, you may never advance to the next set of questions, thereby killing any possible deal. So, give in temporarily and move on. At a later stage, you can reopen the point that you are already conceded
Bait and Switch
Bad ? Untrustworthy ? Conniving ?
Maybe not …
For example, you are negotiating a car, and you say want a rare ‘Cement’ color or less rare, but nevertheless rare ‘Mica blue’ color. You have sensed that the dealer could get you the ‘Mica blue’ but ‘Cement’ is very hard. Then say they you are within $500 of your target price. You could say as the grand finale offer ‘Ok I agree to the price. But it has to be Cement color’ (back pedaling on your acceptance of Mica Blue). Chances are you got a deal. Because, if they say no, they will have to back-peddle on their price
In this technique, one party gets the other party to accept one less thing at a time. By tackling a point at a time, you lose the forest for the trees. It is worsened (or better depending on which side you are) when you focus on a single point, instead of the entire package. For cars, if you focus on the price, you may end compromising on color, options, trims or in severe cases, a entirely different model (yes, Toyota dealers have tried this on me, but I prevailed)
Don’t be pissed
A car dealer once made me test drive a 2017 model when I was looking for a 2018 model. You couldn’t tell the difference unless you looked at the documentation. Many people would be pissed and walk away or yell at the dealer. I chose to bank that as discussion point. When the dealer said ‘the other dealer can’t get you the color you want’, I shut him up by saying ‘I asked for 2018, and you just showed me a 2017. I don’t think you can get me what I want either’. That made him so defensive, he made all kinds of compromises in the next few minutes
Don’t be Afraid
Ask yourself, whats the worst that can happen ? Will you have to pay $1000 more for a car ? Will you be unemployed for a few months ? Will you lose your house ? Or are you just leaving an opportunity. These are not easy questions. When you have been unemployed for a year, and someone throws you a life-line, it is extraordinarily hard to not take it. I’ve been there. Words can’t describe the cocktail of feelings when you are down on your luck and the world wants to exploit you. But like everything else, this too shall pass. Hold your ground, my friend. Sunny days will return
If you do walk away …
Car dealers will call you again some day. Employers will call you again
You will find a car at most the price you walked away from
You will find a job that pays more or doesn’t have a non-compete
There will come a day when you look back and feel good about your decision
Beware of Desperation. When you are hurting, you will be tempted to compromise beyond reason. For example, you might accept a non-compete, or you might accept an exceedingly low-wage
Desperation can make you accept unreasonable compromises
If you do accept a non-compete, make sure it is balanced by something else – like a severance for the period of the non-compete. Non-compete can get very complicated very quickly and destroy your prospects and toss you into an even more desperate situations, and that too after you have spent years thinking you did the right thing
Low wages can establish a level for future employers. If you make $50,000 at this job, it is unlikely that your next employer will pay $100,000 for the same kind of job. The same thing goes for titles.
Always Be Professional
Never ever curse. Never accuse. Never compare the other party to anyone else
An Aggressive Tone is Credible Only When it is Logical
You can use an aggressive tone, while never stooping too low, or using memes, or comparisons or vulgarity. An aggressive tone is credible only when it is logical. Otherwise, it is trash talk, and reflects poorly on you