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Chris Voss's Masterclass Negotiation Principles

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Quote from Ali Scarlett on December 8, 2020, 2:37 am

Unluckily, I'm unable to update the draft I have saved in my Dashboard, most likely due to the changes being made to the website. So, I'll be posting here and then combining everything into the draft later when I have access to it again.

Hey Ali,

I don't think it's because of the change in this case, the core functions should be intact.

I'm thinking it might be because you're logging in with a user, while maybe you had started that draft with another user?
Let me know if that's the case and maybe I can move the draft to the user you want to use.

 

Have you read the forum guidelines for effective communication already?

Yea, as it turns out, it was the wrong account. Good eye, Lucio :).

If you can't transfer it, I might have to check YouTube to figure out a way to do it since WordPress will only let me copy the document's HTML right now.

Quote from Ali Scarlett on December 9, 2020, 2:19 am

If you can't transfer it, I might have to check YouTube to figure out a way to do it since WordPress will only let me copy the document's HTML right now.

I moved it to the correct user account, it should work now.

Have you read the forum guidelines for effective communication already?

Thanks, Lucio! I'll check if it's working now.

Still, I'll be updating this thread to keep myself accountable to finishing the review sooner than later.

Cheers!

The Art of Negotiation (Lesson 7 - Lesson 9): Summary & Review

Bullet Summary

  • The secret to gaining the upper-hand in a negotiation is to give the other side the illusion of control
  • Ask legitimate questions to keep your social capital positive

Negotiation Principles/Strategies:

Ask "How" and "What" Questions

"[A] calibrated question is what we used to refer to as an open-ended question...And, we calibrate it to make the other side feel in charge. The secret to gaining the upper hand in a negotiation is giving the other side the illusion of control. And, we're going to calibrate our questions mostly with the words 'what' and 'how' because people love to be asked what to do. People love to be asked how to do something...They feel in charge. They feel in control. We've got to say it with deference."

"Instead of 'why do you need delivery in three weeks of the product'...change your 'why' to a 'what' and you say, 'what makes it necessary to get it delivered in three weeks?"

In business today, we're often told to find the other side's "why"—to discover their motivations, pain points, goals, and fears. But, when we search for their why by asking them questions using the word "why", it interferes with the relationship and rapport because the word "why" is accusatory. The word "why" creates defensiveness.

Ask Questions to Force Empathy

"Forced empathy is when you force the other side to have empathy with you, and the idea behind empathy--we're trying to trigger reciprocity. We're looking to demonstrate empathy because it's good for us, but we want empathy in return. And, reciprocity may not always kick in. So, we may have to say something at some point in time that forces the other side to take a hard look at our situation before they move forward. And, our classic phrase to force empathy into a situation is simply to say to somebody, 'How am I supposed to do that?"

For example, there was a woman who had done a tremendous amount of work for a company. The company kept promising her follow-on business as a result of it and she was afraid of being denied the follow-on business. So, they owed her a lot of money and they weren't paying, yet they kept sending her more and more work.

One day, when they called her and asked for more work, she said:

Her: "How am I supposed to do that?"

Them: "You're right. You can't. I know we haven't been paying you. We've actually had some real internal problems and the person that's responsible for paying you has changed. I will get in touch with that person. They'll reach out to you and we'll settle up the bill before we move forward on anything else."

Use Calibrated Questions to Shape Thinking

"The question, 'How am I supposed to do that?' is designed to shape the other side's thinking. Shape it around empathy, shape it around thinking about us, trigger slow, in-depth thinking. And, in many cases, you probably want to combine your 'how' and 'what' questions to basically ask up to three questions. They're just worded differently. And, it might be, 'How am I supposed to do that? What's going to happen if I do that? How do I overcome the challenges that I have here?' Those are all basically asking exactly the same question in a different fashion. If you ask that question three different ways, then a person you're talking to will think about it from three different angles, and they'll give it more thought, and they'll give you a better answer."

Avoid Triggering Reciprocity

Right now, this is one of my favorites since it ties into the fundamental concepts of the law of social exchange and social capital, but through the lens of one of the world's top FBI hostage negotiators.

"Reciprocity [the law of social exchange] is a natural human dynamic that exists in us because we're humans and some people are very guarded about it. So, we have to be careful about how we trigger it. If we ask, we tend to owe. People are often worried about asking us because they don't want to owe. So, it's a common dynamic that people are more or less sensitive to at all times."

In other words, when you ask for something, and the other side gives you what you asked for, they gain social credit for that deed and their social capital goes up. Using their increased social capital, they can ask for something back from you and, of course, you'll feel more obligated to give them what they're now asking for (since it's in exchange for what they've just given you).

So, if you don't want to have to give anything but you still want to receive, you have to be careful about how you ask for things, especially in a negotiation where the stage is already set to be transactional.

"In a hostage negotiation, instead of saying, 'I want proof of life,' which would trigger reciprocity [increase his social capital if he provides that value], he says, 'How do I know she's alright?' And, the kidnapper spontaneously does what he wants [he puts the girl on the phone, providing proof of life] because he did it on his own and feels like it was his idea."

In other words, "value" is anything that makes or has the potential to make you better off. That means that for that value to actually be valuable to you, it has to solve or have the potential to solve some problem in your life. In this hostage negotiation, the negotiator had the opportunity to say, "I want proof of life." But, that would signal to the kidnapper that proof of life is something that the negotiator would find valuable and would solve a problem for him (after all, if it didn't, why would he want it?).

So, if the kidnapper would've provided proof of life after the negotiator had already directly asked for it, the kidnapper would then be in a position of higher social capital. In other words, he can take the position of, "I've given you something. Now, I want something in return," which can be a dangerous position for any negotiator to be in, especially when negotiating with a kidnapper.

So, instead of framing his request as an ask, he frames it as a legitimate question. "How do I know she's alright (alive)?" By phrasing your request that way, the problem that you wanted to solve with value from the other side suddenly becomes their problem. That's because it's up to them to answer that question since it's legitimate and, possibly, prove to you that their answer is the truth. Then, when they provide you with that value (an answer along with proof they're telling the truth), you don't owe them anything because you didn't technically ask them for anything. It was their choice to prove to you that they were telling the truth when they answered your legitimate question.

Ask Legitimate Questions

"You're not looking for proof of life, but you're really looking for legitimacy. Proof that you're in a good faith as opposed to a bad faith negotiation. And, what are the natural [legitimate] questions? 'How are we going to move forward if we make this deal? How do I know that you're not just looking for free consulting? How have you worked with people like me in the past? How have you made this deal in the past?"

"You can ask them at the table because they're legitimate questions. That's why we never had a problem with any terrorist, any sociopath, any kidnapper anywhere in the world when we said, 'How do we know our hostage is alive?' They had to admit to themselves, it's a legitimate question."

The Art of Negotiation (Lesson 10 - Lesson 12): Summary & Review

Bullet Summary

  • Accuse yourself of your negatives to reduce your negatives in the eyes of the other side
  • Dump the "yes" ladder, use the power of "no"

Negotiation Concept/Theory: The Accusations Audit

An accusations audit is: "...a comprehensive list of all the negative assumptions, thoughts, and feelings you think the other side may be harboring against you." Voss calls these negative factors, "the elephant in the room".

"Your goal is to list all the possible negative emotions and get out ahead of them. You want the other side to come back and say, "Hold on, you're being too hard on yourself." And, that's because those negative feelings, thoughts, and assumptions the other side might be harboring against you is the elephant in the room. And, as Voss says himself, "The elephant in the room doesn't go away by pretending it's not there. The elephant in the room doesn't go away by you saying, 'There's not an elephant in the room.' The elephant in the room is diminished and eventually goes away by you saying, 'Hey, there's an elephant in the room.' And, then people go, 'Yeah. That's not that bad."

Negotiation Principles/Strategies:

Frame the Accusations Audit by Relationship Longevity

"So, you can frame the accusations audit a couple of different ways. If you've been in the relationship for a while, just the straight label. 'It seems like you're not getting all the information out of us that you want. It probably feels like we're wasting your time. It feels like, that we're not being honest with you...".

"At the very beginning [of the relationship], you can be a little more speculative, a little more tentative with it, a little more just recognizing what might probably happened. So, at the beginning, you might say, 'You're probably going to ask yourself why you're taking this meeting. It probably feels like, that I might seem like everybody else that's in this line of work and that there's no difference between me and anybody else. You may even think like, that the people on your side of the table are going to think you're getting pushed around.' You can be more speculative in those observations because you're converting to the other side that you're being attentive, and you're being speculative, but you're being careful about it the entire time, and they're going to appreciate your approach. This gets back to being a straight shooter."

Get Ahead of the Negatives

You can negotiate for what you want by getting ahead of the negatives. And, you can get ahead of the negatives by anchoring the other side's expectations of the magnitude of the negative significantly higher than the negative's size actually is.

Voss: (calling from his hotel room) I need a late checkout.

Hotel Clerk: No, we can't give it to you. You've got to check out at 11 AM...

(Voss leaves his hotel room and walks down to the front desk up to the hotel clerk)

Voss: (accusations audit) I'm getting ready to make your day ridiculously difficult.

(Hotel Clerk begins to worry and imagine the worst possible thing Voss could have done to their hotel room)

(Voss continues to stay silent, letting worries marinate while waiting to be given permission to go on)

Hotel Clerk: (worriedly gives permission to go on) What is it?

Voss: I need a late checkout.

Hotel Clerk: (relieved) Oh, my God. Okay, sure. What do you need? 2:00, 3:00, 4:00? What do you need?

Negotiation Quick Tips:

Be Exhaustive and Fearless

"How exhaustive should you be in your list of accusations that you're compiling? I'm here to tell you if you don't feel like you're laying it on thick, you're not laying it on thick enough...And, a great way to test that is, as you're laying out your accusations audits, read the other side's reaction all along the way. If you've got a list of 15 things and you've gone through the first three, and they say, 'Oh, you're being too hard on yourself,' you know you've done your job...because when somebody says that, they have stepped to your side of the table. You have forced empathy into the situation and that's exactly what your objective is."

Acknowledge the Danger of "Yes"

"Yeah, yes is horrible...". There are three kinds of yes's: confirmation, commitment, and counterfeit.

*Confirmation

"My confirmation 'yes' is if you've asked me a simple question where you're trying to simply confirm that something is true. My confirmation 'yes' is going to be pretty concise...the more concise and the more curt my tone of voice is, the more likely it is that it's a legitimate confirmation 'yes'." Examples include a short "yeah", "sure", or "OK".

*Commitment

"But, a commitment 'yes' is an agreement. It's 'I agree. I'll go along with it. I will do this. I have agreed that I will do this.' That I'm good with what we're talking about and that I am in agreement with it. And, commitment 'yes' is going to be fairly curt and concise as well. But, it's really going to be driven by the context and what I've said leading up to that and how our conversation has gone."

*Counterfeit

"The counterfeit 'yes' is the 'yes' I'm going to give you when I'm starting to feel trapped by your questions. I don't trust you, I want to find out how soon this is going to be over. [But] Maybe I want to know more. So, I'm going to give you the counterfeit 'yes' because I've already decided that I don't trust you and it's OK because I feel like you're trying to trap me."

"The counterfeit 'yes' it's typically not terribly succinct. It's not short." A counterfeit yes is typically exaggerated and drawn out, such as saying, "Suuuurre." That's because most of the time, a real "yes" is actually a "maybe" or a "no"/rejection in waiting (waiting to be persuaded into a "yes").

In addition to the three tones of voice, master these two essential inflections:

Value the Power of "No"

"A 'no' is so much more valuable than a 'yes'...People feel safe and protected when they say 'no'. This is another one of these human nature laws of gravity...instead of saying, 'Do you agree with this?' I'll say, 'Do you disagree?' Instead of saying, 'Is this a good idea?' I'll say, 'Is it a ridiculous idea?"

"When you say 'no', you feel safe and protected. You feel like you've made no commitment at all. So, you're going to give me a lot more information...[after the 'no'] the additional information is what's more important. 'How is this going to be implemented? What's this going to look like? What haven't we thought of?"

"If I said to you, 'Does this look like something that would work for you? 'If you say 'yes' to that, but you want to give me additional information, you're going to feel like every additional piece of information commits you before you're ready to commit...you feel like everything that comes out of  your mouth reduces your autonomy."

This is because frames are the rule system of relationships. When you say "yes" to a frame, you are agreeing to and buying into that frame which sets you up to have to play by the rules set by that frame. And, that commitment to the frame you agreed to by saying "yes" reduces your freedom.

"But, if you say 'no', having said 'no', you feel there's no commitment afterwards. You can share a lot of information with me. You won't have second thoughts. You won't have commitment fears. And, the information you share with me is going to be very accurate...you're much more likely to lay out what the issues really are because you're going to feel like you can share them with no commitment whatsoever."

Negotiation Principles/Strategies:

The "No"-Oriented Question

About two years ago, Chris Voss was introduced to Robert Herjavec (you may recognize him from "Shark Tank" :).

Through this introduction, Herjavec invites Voss to lunch. Voss says it was his favorite kind of lunch at a steakhouse and that Herjavec paid (WIIFT win!)

So, Voss is spending 90 minutes with Herjavec at lunch which all started off as an email introduction. Herjavec is building out a sales team and is wondering if Voss's company that teaches negotiation, The Black Swan Group, teaches an approach that is good for his salespeople.

Voss's company happens to have a negotiation training session coming up in New York, so Voss offers Herjavec a free ticket. Herjavec's response is, "How many can I buy?"

So, what ensues is Voss's company and Herjavec's company going back and forth on how many tickets Herjavec is going to buy and Voss's team isn't getting a clear commitment out of Herjavec as to how many people he's going to send to this training session.

Voss's team calls Voss on the phone and say, "We're getting ready to sell out. And, if Herjavec and his people don't buy now they're not getting any. They're not even getting their free ticket." (Voss says this is because "...the tickets to our events are expensive and my team is mad at me for giving away anything for free. They don't care who it is, even if it's a famous guy from TV." Talk about a competitive frame!)

So, at 5:03 PM on a Monday, realizing he's going to sell out by tomorrow and Herjavec needs to buy now, Voss sends Herjavec a two-line email.

Voss's Email:

"Are you against committing to three tickets now?

Is it a ridiculous idea for you to pay for the tickets before the business day starts in New York tomorrow?"

And, at 5:04 PM on this Monday, Voss gets an email back from Herjavec saying:

Herjavec's Reply:

"No, we'll make the commitment for three tickets now.

No, we got no problem paying for them right now. My assistant will be in touch with you within the hour.

Send her a link and we'll pay."

Voss sent the link and they made the payment by 5:23 PM that same day.

Move From "No" to How

"What you're really trying to get is an authentic commitment. And, even with that [authentic commitment], 'yes' is nothing without 'how'."

In other words, even if you get a genuine, honest, truthful "yes" confirmation from the other side, it means nothing if you don't know how you want to proceed with the other side.

"So, how do we transition into 'how'? Remember, the key to negotiation is always using deference...So, it's with a [humbly submissive and respectful] tone of voice. And, if they haven't given you a way to proceed, then your first question is, 'How should we proceed? What are the next steps? How would you like to proceed?' Use 'how' or 'what' to begin to pave your way into how you're going to proceed...then, think in advance a little bit because there are always going to be implementation problems. So, in some anticipation of that, you want to ask some 'how' and 'what' questions to deal with implementation problems in advance...Put [on] the safety valves of 'How do we know if we're on track?' and 'How are we going to deal with it if we're off track?' and you'll take care of your implementation.

The Art of Negotiation (Lesson 13): Summary & Review

Bullet Summary

  • Bend their reality by emphasizing their pains instead of their gains
  • Appeal to their sense of fairness responsibly for positive influence over the other side

Negotiation Concept/Theory: Bending Their Reality

"I refer to losing something—loss aversion—as 'bending reality'. Fear of loss and what people lost completely distorts their perception so much that it effectively bends their reality. You have to take that into account, and you have to find out how they feel they are losing because that's going to be the single dominating factor in their decision-making. What are they going to lose if they don't make the deal?"

This is also referred to by John B. Ullmen as pain/gain framing. For example, let's say that you're a company that can make another company 23% more money. You can say:

You: "Work with us and you'll make 23% more money. There will be a 23% gain. The return on your investment will be 23%."

Or, you can say:

You: "Choose not to work with us, stay where you are, don't change anything, and it's going to cost you 23% every day. While you sleep, not working with us is going to cost you 23% day in and day out."

"Fear of loss is what keeps people up at night. Nobody loses sleep—nobody gets insomnia because life is good and they're making money and tomorrow is going to be more profitable than today was. They sleep like a baby over gains. Fear of loss is what keeps people up at night...and that's why it's on of the dominating factors in human decision-making."

Negotiation Principles/Strategies:

Appeal to Their Sense of Fairness

Voss refers to the word "fairness" as the "F" word or the "F-bomb".

"...people will destroy deals if they feel they've been treated unfairly. Intentionally destroy deals and walk away with nothing. On the other hand, people are much more likely to make a deal if they feel the process was fair, and they might take a bad deal or a less than optimal deal if they feel they were treated fairly. So, fairness is really the issue that makes or breaks deals."

Responding to the F-Bomb

Once again, Voss refers to the "F-bomb" as the word "fairness".

"Here's the way the counterpart will try to use 'fair' to their own advantage. Let's say, 'I've given you a fair offer.' Or, they might say, 'I just want what's fair'. In either instance, they've accused you of being unfair in a very subtle way. If you don't take that deal or if you don't make the deal that they want, you are being unfair. Your fairness as a human being has been called into question. It's a great way to manipulate you short-term and you will react because you don't want to be unfair. So, it's going to have an effect on you [especially] if you don't see it coming."

So, when the other side uses that tactic on you, you respond by saying:

You: "I'm happy to be shown how I've been unfair. Show me the information. I'm open to learning. Let me see what it is."

"They are either not going to have it or they know they don't have it."

"So, how do you use the F-bomb positively? How do I [Chris Voss] use it?"

Voss recommends that at the beginning of a negotiation, you say to the other side:

You: "It's my intention to treat you fairly. If at any point in time I've been unfair, let me know. We'll go back and address it and fix it."

Negotiation Concept/Theory: Deadlines Are Meaningless

"Somebody setting a deadline is an attempt to kick some progress into gear. And, if it's a real deadline, there's probably less time than they actually gave you anyway. But, deadlines are designed to get progress started. Every once in a while, in extreme circumstances, a deadline is a hard deadline. Very rarely...the rest of the time it wasn't real. It was something put into the situation by one side in order to kick some progress into gear. And, if people are making substantive progress on what they're trying to accomplish, deadlines go away. So, any time a deadline comes up, shift your thought from the deadline to, 'How do we make progress to work together towards a goal.' And, the vast majority of times, the deadline will go away."

Negotiation Principles/Strategies:

Responding to Deadlines

"Two of the techniques that we've covered already are great ways to respond to deadlines."

Respond Using Labels

The first way is labeling.

Ex:

You: "It seems like you're under a lot of pressure here, it seems like you're trying to get things done by a certain time. It seems like this is an involved process. It seems like the world's going to end if we don't meet that deadline?"

"You know, that's either an accurate label or a mislabel, but you're going to cause the kind of thinking that you need from the other side. And, also, it makes them think about how hard they feel the deadline really is anyway."

Respond Using Calibrated Questions

"The other way to respond to deadlines is with calibrated questions, 'what' and 'how' questions."

You: "What happens if we don't get this done in time? How do we get back on track if we fall behind schedule? How do we pull victory from the ashes of defeat if we don't meet the deadline?"

Negotiation Quick Tips:

Leave A Lasting Impression

"When you're feeling attacked, the things that you really want to say...are probably wrong [negative and value-taking]. You know, we're giving in to an aspect of our natural human nature that wants to get back...that wants to feel like we've gotten the last word in. When the last word is a cheap shot...the last impression is a lasting impression. The last impression seeds the next interaction. When you begin to talk about it like that—that it seeds the next interaction—you begin to realize how you can really get the upper hand by making the last words positive."

So, to leave a great last impression that establishes you as someone they would want to collaborate with in the future, take what you would say at the beginning of a negotiation in order to open it positively and simply put it at the end.

Ex:

How You Would Open A Negotiation Positively:

You: "Look, you know, we're here because we want to make a deal. We're here because long-term relationships matter to us. We're here because we want our partners to be profitable."

How You Would Use That As A Positive Lasting Impression:

You: "You know, we're--we're here because we'd love to have a great long-term relationship. We'd love for our partners to prosper from doing business with us. Let us know how we can proceed. How do you want to proceed?"

"...make the last point you made to be inarguably positive and collaborative, and the last impression will be the lasting impression, and it'll see the next interaction in a very positive way."

 

The Art of Negotiation (Lesson 14 - Lesson 18): Summary & Review

Bullet Summary

  • Anchor their expectations accordingly throughout the negotiation
  • Look for the "unknowns" in the situation that have the power to change the outcome

Negotiation Concept/Theory: The Ackerman System (Bargaining)

"The Ackerman System is a bargaining model...basically, you have a target price that you want to come to. Once you've picked out your target price, you're going to come in at 65% of that price. You're going to plan on making three raises to get to the price that you wanted. And, the first raise is going to be 20% raise, the next raise is going to be 10%, the last raise is going to be 5%. Each one of your raises are decreasing increments by half. And then, when you get to the very last number, you make sure you throw out an odd number and you also throw in some non-monetary object that you know the other side doesn't want, but it makes them feel like they've really tapped you out. They've taken every last dime. You know, they've fought you tooth and nail. They've felt the decreases in increments. They still feel like they're winning. You come in with the last number. It's an odd number. It seems like that you scratched for every penny. And, consequently, they worked so hard to get you there [invested so much social effort], that they want to cut the deal. They're not going to renege."

So, it goes:

Your Set Target Price (How Much You Want to Pay)

1. 65%

2. + 20%

3. +10%

4. +5%

5. Odd Number (+ Non-Monetary Object)

Negotiation Principles/Strategies:

Use The Ackerman System (Bargaining)

Here's an example of this negotiation strategy in action. Let's say that Voss is trying to buy a coffee table for $100. And, that's what he wants to pay. The seller is asking for between $150 and $250.

1. First, Voss finalizes his decision on how much he wants to pay for this coffee table. He decides he is willing to pay $100. This will be his set target price since that's now the price he is aiming for.

2. Next, Voss calculates his initial price.

Initial Price = 65% x 100 = $65

3. Before throwing out his initial price to the seller, Voss anchors the expectations of the seller very low as far as what he thinks his initial price will be. (Voss calls this "emotional anchoring").

Voss: "Look, you know, I got a price. I'll give you the price, but you're not going to like it. I mean, it's going to be low. It's really going to be low. And, I got a feeling that when I give you this price, it's going to make you really angry, and the last thing I want to do is offend you. So, I'm scared to give you the price."

"...you're getting their permission...They're going to imagine something [a price] that's worse than what you would ever throw out."

4. The seller gives Voss permission to give him the price.

5. Voss continues his emotional anchoring.

Voss: "No, it's going to make you angry. You know, I'm scared. And, I'm afraid to give you this number."

According to Voss, by this point, they'll "almost beg you to give them the number".

6. Voss, very apologetically, says to the seller, "$65.00".

"They're not going to be happy with that price, but they asked you for it."

"They're not going to get angry because you told them they were going to get angry and that diffused it."

And, you were deferential the whole time so they feel powerful. They feel bad for you.

7. The seller says, "You know, that's not what I had in mind. You gotta do better than that. I mean, that's ridiculous."

8. In response, Voss uses tactical empathy and gives the seller an apology.

Voss: "I'm so sorry. You know, it's horrible. I can see that I've offended you. And, you're asking a reasosnable price and I'm being ridiculous."

9. Voss continues to hit the seller with different versions of empathy while gauging his reaction.

10. Voss does NOT budge off of his number until the seller budges off of his.

11. The seller comes off his number.

It doesn't matter what number they were willing to adjust their price to. What matters here is that they were willing to adjust it all.

12. Voss shows gratitude by telling the seller he appreciates it, that he's generous, and congratulating him.

"Whatever amount of money they come off of their number, then you've got to be grateful...You've got to enhance the positive emotions. You know, they feel like they've given in. You don't want them to regret giving in."

13. Voss moves from $65 to his next number: $85.

65% + 20% = 85%

85% x 100 = $85

"They're going to feel like that's still not where they want to be, but they're going to feel a sense of accomplishment that you've come from $65 to $85."

14. Voss continues to make the seller feel like he's really squeezing him for every penny.

Voss: "I'd like to give you another number. I mean, I've worked really hard for this. It's been difficult for me to get to this. You know, as a matter of fact, I gotta go back and check my finances before I get this numner. I gotta check with the people. I'm not sure I can cover this."

They're still disappointed (remember, this coffee table costs between $150 and $250), but now they feel hungry because they're making progress. And, as Voss says, "As long as people are making progress, it enhances their ability to stay in the deal."

15. Voss moves from $85 to his next number: $95.

85% + 10% = 95%

95% x 100 = $95

"Now, they're going to feel a sense of accomplishment. But, they're going to know that that last move that you made was smaller than the first one. Always increase by decreasing segments [e.g. +20%, +10%]. Always. You've got to manage the raises."

16. Voss cycles his way back through the whole "dramatic" scenario again. He begins applying more empathy, recognizing that they were generous and voices that he recognizes that he's probably making them angry.

17. Finally, Voss moves from $95 to his final number—the number he's actually willing to give based on his set target price of $100. (This final number must be an odd number.) Voss comes in at $97.43.

He "sells" it dramatically. He asks the other side for a pen and paper and starts jotting down numbers.

"Make a show that you're working really hard. You're tapping the resources where they're going to feel like they worked really hard for it. They're going to feel like they've tapped into your last dime."

18. The seller makes one last move to try and get Voss off of his final number.

19. Voss offers a non-monetary object: his jacket.

Voss: "Ah, you know, ah...You know, I got a really nice jacket. Would you like my jacket?"

"...you're playing into the human nature aspects here which is a bit of a drama play. I realize [that], but these are people with emotions on the other side. Even sociopaths have emotions. So, whoever's on the other side, you need to make them feel a sense of accomplishment, that this was a victory [for them]. A hard-won victory. They got you there every step of the way...And, if they're going to make the deal, they'll make it because they worked so hard for it."

Pivot to Non-Monetary Terms (Bargaining)

"A lot of people are told, 'Go first and go high.' I think that's a bad idea because it's forgoing the opportunity to gather information first...So, if you go first, I get information on you. You haven't gotten any information on me. If somebody is really pushing you to go first, it's also an opportunity to pivot the terms."

When asked to give the price first, Voss recommends you say:

Voss: "Alright, so, I'll be happy to give you a number. Let's set that aside for a few mintues and let's talk about what it's going to take to make a great deal. I mean, what looks like a great deal to you? What else do you have to hav in order to make any price that I give you a good price?"

*Note: This is similar to Barry Nalebuff's technique: Expand the Pie As A First Resort.

"It's always good to prepare some things beforehand so that you're not caught off guard in the moment trying to think of what those things might be."

Voss also recommends that when making this list you view it as a "brainstorming list" to trigger some thoughts from the other side. That's because by engaging in collaborative brainstorming you can come up with ideas that will maintain a good deal when the other side throws in things that you didn't know they have (which happens in nearly every negotiation according to Voss).

And, setting the price aside to focus on the terms is a great move because, "The price will break the deal, but the deal is made on the terms."

Provide a Range (Bargaining)

"Well, setting a range is a great way to not exactly name a price first also. You can do a range of what's going on in the market. You can do a range of what you might be willing to pay."

"Understand that whenever you throw out a range, the other side is going to settle on the one that most favors them. They're not going to compromise and meet you in the middle of that range...You'd better be willing to accept that. If you come off of that, then they're going to be able to accuse you of bad faith bargaining for good reason because you gave [them] the impression [that] if you threw that number, that you'd take it."

Negotiate Price With Terms

*Note: This is also similar to Barry Nalebuff's technique: Expand the Pie As A First Resort.

"A [price] range is going to be dictated by two things: what's going on in the market and what you can pay. What you can pay may not line up with what's going on in the market. And, there's always a possibility that other terms still might make your number work. And, that's why the brainstorming with your counterpart is extremely important because there may be something really valuable that you could do [for them] that's not reflected in the market."

Anchor Emotions, Not Dollars

"An anchor is a price that you throw out that's quite some distance from where you expect to land...gives me a lot of room to manoeuver. Makes you feel like you won when you get me to my actual price."

Voss says that a lot of people will tell you to anchor extreme because they'll say that that will give you better deals. But, what that's really going to do is make a lot of deals go away because "the terms make the deal".

"I'm more concerned with the emotional anchor, the emotional reaction to my price. Negative reactions leave a toxic residue that, by and large long-term, are bad for relationships."

Voss says you want them to actually be relieved when you give them your number. So, you can say:

Voss: "Look, my number is high. Don't expect anything other than that to be high. It's going to be higher than you expect, probably more than you plan to pay, maybe more than you have."

"Now, by the time I drop that number, you're not going to overreact to the number. It may still be more than you plan to pay, but you're not going to be mad about it."

Negotiation Concept/Theory: The Black Swan Concept

"The black swan is [the] something that nobody expected would happen, but in hindsight, changed everything as soon as it was revealed."

"So, this is what great negotiation is about. Discovering the black swan. Discovering the piece of information that nobody expected that would change all the outcomes."

Black Swans in Business

"If you're negotiating a for a salary, you might not know that behind the scenes of the company, that the person that you're going to work for is going to leave in a year. You don't know what opportunities are coming in conjunction with that job that the company's already forecasted and budgeted out. You don't know who's planning on moving on. You don't know all the things that are going on behind the scenes. All you know is they've offered you this job within these parameters. But, they already know, have a very good idea of the dynamics that they hope to change in the company over the next year. Finding out those dynamics behind the scenes could either make it a wonderful place for you to work or a horrible place. And, it has nothing to do with the job description at the moment. The things that they know that  you don't know are the black swans."

There's also a chance that you have value (possibly in the form of a valuable sill set) that fills a specific strategic need in their company that they don't know you have yet. If you are in talks with them about a salary increase and they don't know that this value is something you bring to the table, that's an example of a black swan that you bring to the negotiation.

Negotiation Principles/Strategies:

Find the Black Swans

"So, the idea is to start the communication and for me to start getting the information flowing from you so that I can find out what those black swans are and I can change the outcome."

Negotiation Quick Tips:

Open Yourself to the Unknown

"Since I don't know what you're hiding and you don't know what I'm hiding, there's stuff in that overlap that we really don't know is there at all...The real black swans are where the unknowns overlap, and there's some crazy stuff in there. You can't tell yourself, 'Ah, I understand the situation, I understand all about it.' You can't tell yourself that. That's to close your mind in advance. And, there isn't anybody anywhere that says a closed mind is an advantage. So, open your mind and be curious. Be interested. Wonder about it. Don't be afraid of being surprised. Actually, hope to provoke surprises...because it's not possible to know everything [about the negotiation]."

That's the whole course! Article coming soon 😀

BTW, Lucio, the transfer didn't work and WordPress still wanted me to re-write the entire article using HTML only in the wrong account.

So, I put the document in "preview" mode, started a New Post in the right account, and copy/pasted the article over from the preview to finish it. Now, it's done!

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