Hard negotiations: why a softer approach yields better outcomes(knowledge.wharton.upenn.edu)
knowledge.wharton.upenn.edu
Hard negotiations: why a softer approach yields better outcomes
https://knowledge.wharton.upenn.edu/article/hard-negotiations-why-a-softer-approach-yields-better-outcomes/
152 comments
The appropriate strategy is context-dependent. Your strategy is appropriate for most cases, but there are some situations where your interaction is a one-off, and you don't expect to have to interact with your counterparty at all after the transaction. Buying a car is a typical example here: If you're able to negotiate a car dealership down to a price that's minimal profitable for them, the dealer will be unhappy, but there are no negative consequences for you. In those situations you should absolutely "try to win" - an extra 1-5% off is money in your pocket, and there are no negative consequences beyond some uncomfortable interactions with the dealership staff.
TL;DR - Don't buy a car or house using the same negotiating strategy you would use to negotiate a professional services contract.
TL;DR - Don't buy a car or house using the same negotiating strategy you would use to negotiate a professional services contract.
Interestingly, I actually use this strategy when I make large personal purchases as well. It has always gone well. There's an element of strategy involved, however, such as buying on the last day of the quarter when sales quotas/bonuses/manufacturer bonuses, etc all come into the forefront of everyone's mind at the dealership.
I never try to put the other person in the unenviable position of actually having to ask the manager (not the fake ask the manager show they put on). I do however call up friends and find out what the thing costs on the invoice and then go in with that as my offer. (If you are diligent enough to poke around online forums and find the right people you could probably get the same information).
Success rate: The last 2 vehicles I've bought I could have sold the same day for more than I paid.
I never try to put the other person in the unenviable position of actually having to ask the manager (not the fake ask the manager show they put on). I do however call up friends and find out what the thing costs on the invoice and then go in with that as my offer. (If you are diligent enough to poke around online forums and find the right people you could probably get the same information).
Success rate: The last 2 vehicles I've bought I could have sold the same day for more than I paid.
Interestingly I bought one new car once at below dealer invoice. I did all my research and then their starting offer was low.
Story turned out to be that they didn't control the mix of cars that they got, but they could sell every Prius with all options for top dollar. So internally they marked other cars down to sell fast so that they could get more Priuses.
It goes to show how dealer incentives don't always align with the manufacturer's.
(This was in Santa Monica in 2005.)
Story turned out to be that they didn't control the mix of cars that they got, but they could sell every Prius with all options for top dollar. So internally they marked other cars down to sell fast so that they could get more Priuses.
It goes to show how dealer incentives don't always align with the manufacturer's.
(This was in Santa Monica in 2005.)
There are definitely quirks to the way car dealerships are run. I imagine there are similar 'weaknesses' in just about every industry if you put in the due diligence to find them. I always find it somewhat comical when incentives backfire in interesting ways. There are a bazillion tales from HR/Recruitment/Salespeople out there about spectacularly stupid incentives, and I can't help but read every single one of them.
If you end up with a similar situation in your next vehicle purchase it might be worth writing up a blog. I know I'd read it!
If you end up with a similar situation in your next vehicle purchase it might be worth writing up a blog. I know I'd read it!
Dealers and manufacturers have reacted to the wide availability of invoice pricing. Invoice is not the real price the dealer pays anymore. There are many other incentives involved, such as survey scores for luxury brands or mix of models sold (sell X of a model that isn't moving and we'll allocate you Y of the really hot model you can sell for MSRP because they're in demand).
The purpose of this system is partially to obfuscate the real "invoice" price so buyers searching the internet (or services like Edmunds) can't accurately price the car. It also allows the manufacturer to exert more control over dealers.
The purpose of this system is partially to obfuscate the real "invoice" price so buyers searching the internet (or services like Edmunds) can't accurately price the car. It also allows the manufacturer to exert more control over dealers.
This is not true everywhere. Forward thinking dealerships recognize the truth of this article and have adjusted their revenue models accordingly.
As an example, I got to know the leadership at the DGDG dealer group in the Bay Area over the past couple of years, and they've fully embraced the notion that there's not much money to be made on the sale itself -- and the more you try to make, the more your customers dislike you.
Instead, they aim for the price you might be able to negotiate down to somewhere else, and focus on making it an extremely pleasant experience. The goal is for you to return for trade-ins, maintenance, and all other auto related transactions.
As an example, I got to know the leadership at the DGDG dealer group in the Bay Area over the past couple of years, and they've fully embraced the notion that there's not much money to be made on the sale itself -- and the more you try to make, the more your customers dislike you.
Instead, they aim for the price you might be able to negotiate down to somewhere else, and focus on making it an extremely pleasant experience. The goal is for you to return for trade-ins, maintenance, and all other auto related transactions.
In the UK, sites like autotrader.co.uk make price transparency crystal clear, even going so far as to prominently advise that an advertised price is great/low/fair/high for the make/model/age/mileage in question. Dealerships now seem to make money on finance - why haggle about a £500 price difference on a £20,000 car when there's £7,000 on the table via a 12% APR finance rate?
That changes the negotiation strategy for the dealer, but doesn't really change it for you. Even with a "nice" dealer who's planning on making money later in the car's lifecycle, your incentive is to get the lowest price possible, and there are no negative consequences from negotiating a price that is "too low".
...unless you somehow manage to piss off the mechanics who will be servicing your vehicle.
>Buying a car is a typical example here: If you're able to negotiate a car dealership down to a price that's minimal profitable for them, the dealer will be unhappy, but there are no negative consequences for you.
I am not disagreeing with your negotiation strategy, but why would the dealer be unhappy about making a sale?
I am not disagreeing with your negotiation strategy, but why would the dealer be unhappy about making a sale?
They're unhappy that they made less selling the car than they expected to.
Not really true. Most dealer profit on new cars isn’t in markup. It’s on the financing, sales incentives, and the service dept.
If you negotiate an all-in price that's a $1000 lower than a typical customer, that's straightforwardly $1000 they don't get. The fact that your price was lower doesn't cause their other sources of revenue on the sale to go up.
If they give you a deal but get you to agree to a higher finance rate, they make more money
Agreed - you should always look at all-in costs, including financing. Normally better to get financing somewhere else ahead of time if you have good credit.
That is still misleading from the overall profit picture because the dealer can be getting points back on the loan.
That doesn't effect the price you ultimately pay, just who gets what.
(E.g. your "true" interest rate is 2.5%, the dealer gets you to take a loan at 3.9%...they pocket the 1.4%)
That doesn't effect the price you ultimately pay, just who gets what.
(E.g. your "true" interest rate is 2.5%, the dealer gets you to take a loan at 3.9%...they pocket the 1.4%)
To put this another way, in some negotiations, the other side has already decided to play hardball from the start.
Well, not quite -- the post was saying that if you never interact with the other party again, regardless of whether they're playing hardball or softball, there is no post-agreement fallout if you play hardball, because, well, there is no post-agreement interaction (like the buying a car example).
Presumably, for a job or professional services contract, where there is significant post-agreement interaction, the article's prescription for and reasoning behind not playing hardball still applies, even if the other party plays hardball.
Presumably, for a job or professional services contract, where there is significant post-agreement interaction, the article's prescription for and reasoning behind not playing hardball still applies, even if the other party plays hardball.
This is a good point. And, in particular, the car salesperson already knows that this interaction is one-off and is negotiating with that strategy, so if you don't you are at a significant disadvantage.
The salesperson is not your friend. They know this already and the sooner you realize it too, the sooner you can get to a reasonable deal.
The salesperson is not your friend. They know this already and the sooner you realize it too, the sooner you can get to a reasonable deal.
I did this for a recent car purchase and the
>there are no negative consequences for you. did not prove true.
I have free service for the first year or so, not to mention all the warranty issues (none of those yet knock on wood) and guess which dealership is the only one close enough to my house to have free shuttle service?
That's right, the dealership that I absolutely destroyed in a game of hardball when buying the car.
Talk about a Pyrrhic victory.
Edit: maybe the service department of my dealer is just really bad. I was assuming the poor work they were doing on my car was related to my experience with the sales staff.
>there are no negative consequences for you. did not prove true.
I have free service for the first year or so, not to mention all the warranty issues (none of those yet knock on wood) and guess which dealership is the only one close enough to my house to have free shuttle service?
That's right, the dealership that I absolutely destroyed in a game of hardball when buying the car.
Talk about a Pyrrhic victory.
Edit: maybe the service department of my dealer is just really bad. I was assuming the poor work they were doing on my car was related to my experience with the sales staff.
I guarantee that the only person that will recognize you when you walk in the door is the specific salesperson you worked with—and they likely won't recognize you beyond, "I think I've seen that person before—maybe I sold a car to them."
Making the customer feel that they took the dealer to the cleaners is a time-honored sales technique. They still made money off of you, and will be happy to treat you just like any other customer.
Making the customer feel that they took the dealer to the cleaners is a time-honored sales technique. They still made money off of you, and will be happy to treat you just like any other customer.
A car dealership is like a casino. The house always wins.
So are you saying they are refusing to give you service or provide you with a shuttle they're providing other customers with simply because you talked them down to a price they still agreed to?
Service and Sales are completely different departments. They rarely speak. They rarely interact. They report through different managers, sometimes up to the VP level for large dealer groups. I've known a handful of car salesmen (half dozen or so) and quite frankly can't believe a story like yours would ever happen at any dealership large enough to have both an in-house service center as well as free shuttle service.
Service and Sales are completely different departments. They rarely speak. They rarely interact. They report through different managers, sometimes up to the VP level for large dealer groups. I've known a handful of car salesmen (half dozen or so) and quite frankly can't believe a story like yours would ever happen at any dealership large enough to have both an in-house service center as well as free shuttle service.
Agreed that OP's post is somewhat nonsensical. How can one "absolutely destroy" a dealer who still makes the deal? Making deals is their business--that's the one thing they have to be competent at on the sell side. Maybe they want some troublesome customers to feel like the customer "won" but there is next to zero chance an average customer pulls the wool over their eyes or successfully strongarms a dealer. You'd have to set up some kind of situation like the one where Donald Trump stiffed a music store owner.
dealership that I absolutely destroyed
To these places you are a "type". They probably clocked you in moments as "guy who like to think he's playing hardball and winning" and walked you through that set of conversational gambits. At the end they end up with a profit in their acceptable range, you end up feeling you came out ahead. "win-win"
Sometimes they think they will get you in finance or in addons and if you don't let them, then yes it's possible to destroy them in relation to a normal transaction. They often get paid on incentives or other structures too so they could be getting destroyed on a single sale. Last car I bought I negotiated the price and then the finance guy came over and hadn't yet understood that I already had financing ready at a super low rate. So they thought they would get me there but I refused to let them even try to run my credit.
It's certainly possible they made no money on the sale itself for a variety of reasons.
It's certainly possible they made no money on the sale itself for a variety of reasons.
They love getting you on financing, but will never count on it if it’s not already on the offer.
You might have got them down to net zero on this on - I have no idea. But the vast majority of people who think they did, didn’t. Just part of the game.
There are pretty reliable ways to get a good/better deal , but they still make a bit of money. And you’ll usually compromise something too.
You might have got them down to net zero on this on - I have no idea. But the vast majority of people who think they did, didn’t. Just part of the game.
There are pretty reliable ways to get a good/better deal , but they still make a bit of money. And you’ll usually compromise something too.
I don’t understand, you don’t have to interact with the sales team in order to get warranty services.
I understand where you are coming from, and I've heard similar sentiments from other people. Having said that, I have never personally experienced this with a dealer. There just isn't that much interaction between the sales and service department at most dealers, beyond what is required for the sale itself.
There may be exceptions, but I haven't seen them.
There may be exceptions, but I haven't seen them.
> 3. Don't try to win. (The extra 1-5% you might gain in most cases is outweighed by the negativity of the event. If you're negotiating with a future employer, vendor, or potential client, then the value of having them actually want to talk to you is greater than the difference most of the time.)
This one is useful when the two parties are equals, but it is horribly wrong in negotiating with a future employer.
Once they've identified you as someone they want, and they've made you an initial offer, nothing you can say* will make them walk. And if you negotiate well, you'll be identified as higher value than someone who didn't.
*Within reason - if they offer $120k and you ask $150k, that's fine. If they offer $120k and you ask $500k, you might run into problems.
This one is useful when the two parties are equals, but it is horribly wrong in negotiating with a future employer.
Once they've identified you as someone they want, and they've made you an initial offer, nothing you can say* will make them walk. And if you negotiate well, you'll be identified as higher value than someone who didn't.
*Within reason - if they offer $120k and you ask $150k, that's fine. If they offer $120k and you ask $500k, you might run into problems.
Positioning fair market value as your asking price (whether it's 500k or 25k) isn't what I'd call trying to win. It's just asking for fair compensation. If you know the rough value of your position, which isn't normally too difficult to ascertain with reasonable accuracy, you can feel pretty good about making such a request. (And of course, if you are in the top x% for your role, then that just tips the scales further)
Hey, this isn't really true. Some management / HR folk will brag about revoking offers. Makes them feel real good about themselves and the power they weild
...
You don't want to work for these companies.
You don't want to work for these companies.
I'm sure this is true, but most companies don't want this either. They lose money and waste time when this happens -- if they waited until the end to discuss salary (like they should be).
Some companies will try to feel you out for salary right off the bat in order to "weed out" anyone who would ask for too much money, and you need to always resist this.
Some companies will try to feel you out for salary right off the bat in order to "weed out" anyone who would ask for too much money, and you need to always resist this.
Why do you resist talking about salary until the end?
Your bargaining position is much better once they've already decided they want to hire you. Talking about salary first lets the company cheap out and only spend that effort on people they are reasonably sure won't ask for what they're worth.
This is why so many places have a "Salary Expectations" box or something similar on their interest form. Some will even try to brow beat you into saying a number. Never do this until they've named a number first. This puts pressure on them to offer something reasonable right off the bat, instead of having the pressure on you to not ask too high.
This is why so many places have a "Salary Expectations" box or something similar on their interest form. Some will even try to brow beat you into saying a number. Never do this until they've named a number first. This puts pressure on them to offer something reasonable right off the bat, instead of having the pressure on you to not ask too high.
The strategy is meant to introduce more sunk costs in the hiring process. They spent forever buttering up the candidate, and now they hear a number that is more than they were hoping for.
The less they need you, the less this is likely to matter. But if they really need you then of course your price is high!
The less they need you, the less this is likely to matter. But if they really need you then of course your price is high!
An HR functionary doing a preliminary phone screen might dismiss a candidate who asks $135k for a position with a $100-130k range.
A hiring manager, after having offered $130k, would never do something that stupid.
A hiring manager, after having offered $130k, would never do something that stupid.
Further, those people are loser PHBs whose antisocial behaviors drive away good talent. Their behavior will eventually catch up with them.
I don't want to work for those people. I'll keep negotiating to win when it comes to salary.
There is a both a significant overlap and significant difference between bargaining and negotiating. The part of negotiating that is not bargaining includes gaining rapport, what former FBI Hostage Negotiator Chris Voss calls "tactical empathy".
President Lincoln summed it up best:
"If you would win a man to your cause, first convince him that you are his sincere friend.
"Therein is a drop of honey that catches his heart, which, say what he will, is the great high road to his reason, and which, when once gained, you will find but little trouble in convincing his judgment of the justice of your cause, if indeed that cause really be a just one."
I teach some of the principles of rapport to stand-up comics. For example, do your material until they start ignoring you, then talk to the audience. When they start paying attention, return to your prepared material.
President Lincoln summed it up best:
"If you would win a man to your cause, first convince him that you are his sincere friend.
"Therein is a drop of honey that catches his heart, which, say what he will, is the great high road to his reason, and which, when once gained, you will find but little trouble in convincing his judgment of the justice of your cause, if indeed that cause really be a just one."
I teach some of the principles of rapport to stand-up comics. For example, do your material until they start ignoring you, then talk to the audience. When they start paying attention, return to your prepared material.
> Don't try to win.
I prefer to think of this as winning the short vs. long game. If a person wins this single deal for +5%, but blows up the relationship, they have likely lost the long game. Now any future deal with the 'loser' will be harder, and there may be ripple effects out to other deals.
The above is not only with business deals, but with but life in general.
I prefer to think of this as winning the short vs. long game. If a person wins this single deal for +5%, but blows up the relationship, they have likely lost the long game. Now any future deal with the 'loser' will be harder, and there may be ripple effects out to other deals.
The above is not only with business deals, but with but life in general.
The opposite effect is that if you don't expect to deal with this person in the future again, negotiating harder starts making sense again. If you play soft to improve the relationship with some random trinket vendor in a touristy location for example, you win nothing. The difficult part is in correctly estimating which type of situation you are in.
If there are indeed zero consequences to harming the relationship, sure, you 'win'. In practically all real situations, there are consequences: You personally become inured to harming relationships, if it's a business transaction your coworkers get used to that as well. If your victim talks to other people you might do business with (either through networks you're unaware of - trinket vendor happens to have a beer with your hotel concierge, say - or just by leaving a negative comment on your business' social media, that has consequences. Or if previous people like you have played hardball with them in the past you might be starting out from a far worse perspective than if they thought people like you were generous and kind.
I personally can't stand it when rich foreigners try to get a souvenir for a few dollars less than the list price. That infinitesimal fraction of your wealth doesn't matter to you; but it could make a big difference to them. And similarly, I hate when I have to treat business deals as if I'm negotiating with a hostile enemy, when we can both benefit.
I personally can't stand it when rich foreigners try to get a souvenir for a few dollars less than the list price. That infinitesimal fraction of your wealth doesn't matter to you; but it could make a big difference to them. And similarly, I hate when I have to treat business deals as if I'm negotiating with a hostile enemy, when we can both benefit.
> I personally can't stand it when rich foreigners try to get a souvenir for a few dollars less than the list price.
If you don't haggle in haggle culture, you're missing out. It's just part of the experience.
Of course you may not enjoy it, in which case missing out is preferable but it serves many purposes.
If you don't haggle in haggle culture, you're missing out. It's just part of the experience.
Of course you may not enjoy it, in which case missing out is preferable but it serves many purposes.
I didn't write "The difficult part is in correctly estimating which type of situation you are in." for nothing, and the hypothetical trinket vendor is just an example. Like you say, any situation where negotiating actually matters is unlikely to be about a one-time transaction.
That said, the GP comment was about trying to win the long game by sacrificing the short game, and I meant to point out that there is not always a long game and even if there is, not everyone subscribes to the same win/win philosophy and recognizing when your negotiating partner doesn't is a valuable life skill.
That said, the GP comment was about trying to win the long game by sacrificing the short game, and I meant to point out that there is not always a long game and even if there is, not everyone subscribes to the same win/win philosophy and recognizing when your negotiating partner doesn't is a valuable life skill.
> if previous people like you have played hardball with them in the past you might be starting out from a far worse perspective
Yep, this is an excellent point. The interaction doesn't quite take place in isolation: it's in a societal environment, and your actions can return to you through that network in some form.
Yep, this is an excellent point. The interaction doesn't quite take place in isolation: it's in a societal environment, and your actions can return to you through that network in some form.
> If you play soft to improve the relationship with some random trinket vendor in a touristy location for example, you win nothing.
Is it really true that you would win nothing? I think that one might be a better person to leave just a little on the table rather than have that random trinket vendor right on the knife-edge between taking the deal and refusing it.
One might even say that one could win one's soul!
Is it really true that you would win nothing? I think that one might be a better person to leave just a little on the table rather than have that random trinket vendor right on the knife-edge between taking the deal and refusing it.
One might even say that one could win one's soul!
You'll find no shortage of people wanting to negotiate with you if you are consistently willing to give up negotiating leverage for feeling good afterwards. In the case of the trinket vendor, they won't spend a second thinking about that one tourist who negotiated better or worse than the other hundred tourists that day. There is nothing intrinsically wrong with charity, but I don't think you should delude yourself into thinking it's anything other than that. Personally I can think of other causes I find more deserving than trinket vendors in touristy areas but whatever floats your boat on that.
For some winning is crushing the opponent. But this mentality works short term only.. I prefer to find the middle ground if possible
I'd distinguish between scenarios in which there is a win-win solution and those in which there isn't. If there is a win-win scenario, then there should be one or more bargaining equilibria as a rational solution to the problem, and negotiating merely consists in providing the information and insight that allows both parties to reach or get close to an equilibirum. This activity is cooperative.
"Real" negotiation takes place when there is no such equilibrium. For example, hostage negotiations, car sales, or a negotiation between a landlord and the tenant are of this sort. Maximizing your utility minimizes the other's utility, and vice versa. These types of negotiations proceed only by using psychology to trick the other side into making concessions. Being a tough guy is mostly counter-productive in such cases, too, it's more about exploiting cognitive biases like the anchoring effect. This activity is adversarial.
Good mediators are people who are able to turn such win-lose scenarios into real bargaining with win-win solutions, not by mere "reframing", but by really changing the decision/distribution problem. That's often possible, if you make the goals of the participants and broader setting/presumptions part of the negotiations.
"Real" negotiation takes place when there is no such equilibrium. For example, hostage negotiations, car sales, or a negotiation between a landlord and the tenant are of this sort. Maximizing your utility minimizes the other's utility, and vice versa. These types of negotiations proceed only by using psychology to trick the other side into making concessions. Being a tough guy is mostly counter-productive in such cases, too, it's more about exploiting cognitive biases like the anchoring effect. This activity is adversarial.
Good mediators are people who are able to turn such win-lose scenarios into real bargaining with win-win solutions, not by mere "reframing", but by really changing the decision/distribution problem. That's often possible, if you make the goals of the participants and broader setting/presumptions part of the negotiations.
> "Real" negotiation takes place when there is no such equilibrium. For example, hostage negotiations, car sales, or a negotiation between a landlord and the tenant are of this sort. Maximizing your utility minimizes the other's utility, and vice versa.
Ummm, hostage negotiations probably don't have a win-win, but I think that it's at least arguable that car sales and landlord-tenant negotiations do.
After all, it's a win-win for the car buyer to have a car and the car dealer to have some dollars (lose-lose would be for the car-wanter to have no car, and the dealer to have no dollars). Likewise with landlord-tenant negotiations: the tenant wins by getting a place to use, and the landlord wins by getting money. Sure, the tenant would like to use the place with no restrictions whatsoever, and the landlord would like all the money of the richest tenant ever, but there's a point where each gets enough of what he wants to make the deal worth making.
Ummm, hostage negotiations probably don't have a win-win, but I think that it's at least arguable that car sales and landlord-tenant negotiations do.
After all, it's a win-win for the car buyer to have a car and the car dealer to have some dollars (lose-lose would be for the car-wanter to have no car, and the dealer to have no dollars). Likewise with landlord-tenant negotiations: the tenant wins by getting a place to use, and the landlord wins by getting money. Sure, the tenant would like to use the place with no restrictions whatsoever, and the landlord would like all the money of the richest tenant ever, but there's a point where each gets enough of what he wants to make the deal worth making.
The mistake in gp is that a car buyer and a tenant are not in a zero sum negotiation. If you look solely at the car purchase a buy and seller are. But there is more to that -- there is the time spent shopping and the advertising to acquire a customer. The clock is constantly running on both of those. So it is a positive (or elimination of a negative) to complete a deal.
This is why it is easiest to negotiate when you don't actually need to.
This is why it is easiest to negotiate when you don't actually need to.
I agree, I'm not sure the car salesman example was good. With the landlord-tenant example I should have been more specific. I meant a case that I experienced myself, the ownership had changed and the new landlord wanted to raise the rent. I wanted to keep the old rent, which was my right. In the end I faltered, although I made an overall good deal for me, he managed to raise the rent by using the usual threat: We're going to have to build a balcony. He also cut off my phone cable. A really charming guy.
Back then I didn't know the tricks of how to negotiate in such adversarial situations. Our goals were really just "raise rent vs. keep rent as is". You could say that it was still win-win, though, for example by pointing out that our secondary goals were to maintain good relations and not have any lawsuit.
Back then I didn't know the tricks of how to negotiate in such adversarial situations. Our goals were really just "raise rent vs. keep rent as is". You could say that it was still win-win, though, for example by pointing out that our secondary goals were to maintain good relations and not have any lawsuit.
This advice seems fine but not great for salary negotiation.
In general, because of the information asymmetry and extreme advantage the employer has over the employee, accepting a weak offer can mean leaving over 30% on the table, and that matters to individuals. (It matters to some companies)
You can have healthy conversations explaining that you want to reach an agreement that's good for both of you and still explain that you need to get paid. Companies and recruiters actually value that _more_.
My recommended reading/listening on negotiating as an employee is patio11's posts.
As a company, yeah, don't try to "win" and be fair (as much as is possible given funding constraints)
In general, because of the information asymmetry and extreme advantage the employer has over the employee, accepting a weak offer can mean leaving over 30% on the table, and that matters to individuals. (It matters to some companies)
You can have healthy conversations explaining that you want to reach an agreement that's good for both of you and still explain that you need to get paid. Companies and recruiters actually value that _more_.
My recommended reading/listening on negotiating as an employee is patio11's posts.
As a company, yeah, don't try to "win" and be fair (as much as is possible given funding constraints)
> And lastly, #4 - If your counterparty plays hardball with you, give them a truly fair offer that addresses their needs. If they don't take a fair deal when offered, be prepared to walk away.
I think this is easier said than done. A lot of negotiations are invariably started with very incomplete information. Knowing what a fair offer for the other side would be often isn't clear.
I think this is easier said than done. A lot of negotiations are invariably started with very incomplete information. Knowing what a fair offer for the other side would be often isn't clear.
If this game at ncase [0] has taught me anything, it is that adversaries tend to exploit good intentions, more often than not. It is really difficult to navigate such waters, imo. I haven't figured out the panacea, but it is safe to assume that negotiation tactics must be in accordance with level of trust and situational context. Looking after one's own self-interest regardless tends be a nice rule of thumb.
[0] https://ncase.me/trust/
[0] https://ncase.me/trust/
#4 is key, and in business, you often lose that ability. You can’t tell AWS, Microsoft or Oracle to pound sand, for example. (In most cases.)
In those situations, usually the path to getting the best outcome is more about you. If you deeply understand what you need, especially as compared to what you want, you can get relative advantage.
Usually people who are selling things care about this quarter more than next year. If you understand what they need to get, you can usually find a way to make things work.
In those situations, usually the path to getting the best outcome is more about you. If you deeply understand what you need, especially as compared to what you want, you can get relative advantage.
Usually people who are selling things care about this quarter more than next year. If you understand what they need to get, you can usually find a way to make things work.
Some cultures are win-lose, so to strike a deal you have to look like you're losing.
It's totally possible that I've been lucky in my career so far. Or just that my personality type lends well to this sort of thing.
There are exceptions to every rule, but I've negotiated with Russians, Chinese, Americans, British, French, Italians...and just about every other European country and probably a few others I'm forgetting. (Deal sizes have been 1m+, but there's definitely layers above that where I don't have experience.) In all my experience thus far, I can honestly say I've only ever had the displeasure of having to manufacture a 'loss' once. And that was dealing with an American, albeit he was working for a large Chinese company.
I'm always eager to hear about other folk's experiences, so if you can give some more insight into what cultures you've seen this with and how you've managed to handle it I'd love to listen!
edit - I just realized the tone of this might come off as a tad 'superior' and that's truly not my intent. If you have experiences that can potentially make me better at what I do, I'm genuinely eager to learn.
There are exceptions to every rule, but I've negotiated with Russians, Chinese, Americans, British, French, Italians...and just about every other European country and probably a few others I'm forgetting. (Deal sizes have been 1m+, but there's definitely layers above that where I don't have experience.) In all my experience thus far, I can honestly say I've only ever had the displeasure of having to manufacture a 'loss' once. And that was dealing with an American, albeit he was working for a large Chinese company.
I'm always eager to hear about other folk's experiences, so if you can give some more insight into what cultures you've seen this with and how you've managed to handle it I'd love to listen!
edit - I just realized the tone of this might come off as a tad 'superior' and that's truly not my intent. If you have experiences that can potentially make me better at what I do, I'm genuinely eager to learn.
Would you care to give some examples? I’ve heard this before but haven’t found it to be true in any situation involving repeated negotiations (not one-off transactions)
All negotiations work in good faith until you encounter Information Asymmetry [0]. Then, it is really a "win-lose" situation.
[0] https://en.wikipedia.org/wiki/Information_asymmetry
[0] https://en.wikipedia.org/wiki/Information_asymmetry
This is absolutely true, and I address this as part of rule #1.
-- Below is how I mitigate that in my world, but if anyone has good strategies/tactics to handle such scenarios, please share!
Being well-informed means going in with the best possible knowledge. Of course, there's always the chance to step on a land-mine, but more often than not if you put in the work you can learn everything you need to know to frame the negotiation in a constructive manner.
Some really important points that are relevant for what I do (and may help others!)
1. Who are the stakeholders in the negotiation? Is it the person I'm speaking with, their superior, or a party much farther removed (shareholder/board member/internal influencer) that must be identified.
2. Who in their company is responsible for the information I need, if such a person even exists? Can I address the relevant questions directly to this person? (Sometimes this is as easy as sending an email and literally just asking. Sometimes not)
3. What are their high-level goals? If they are a public company you can glean a lot from their public reports and financials. Sometimes you can find out that you're basically swimming upstream, and sometimes you find out that your counterpart is basically mandated to make certain decisions.
4. Is there any visible progress towards their goals? If they're struggling to make headway, and you can identify this, you can re-focus the discussion on making their pain point go away. (This depends heavily on what you do, but for my field, I can almost always find accurate information)
Ultimately, the prep work for a serious negotiation is what we internally call CIA work. It's a lot of intelligence gathering, asking (sometimes indirect) questions to get some insights, and doing the due diligence to ensure that we're as informed as we can be. Even with all that effort negotiations still fail sometimes. But if they fail, it's usually because the type of deal that would be struck wouldn't make sense in the first place.
Of course, this doesn't apply to hostage negotiations or to what I could only describe as 'toxic' scenarios.
-- Below is how I mitigate that in my world, but if anyone has good strategies/tactics to handle such scenarios, please share!
Being well-informed means going in with the best possible knowledge. Of course, there's always the chance to step on a land-mine, but more often than not if you put in the work you can learn everything you need to know to frame the negotiation in a constructive manner.
Some really important points that are relevant for what I do (and may help others!)
1. Who are the stakeholders in the negotiation? Is it the person I'm speaking with, their superior, or a party much farther removed (shareholder/board member/internal influencer) that must be identified.
2. Who in their company is responsible for the information I need, if such a person even exists? Can I address the relevant questions directly to this person? (Sometimes this is as easy as sending an email and literally just asking. Sometimes not)
3. What are their high-level goals? If they are a public company you can glean a lot from their public reports and financials. Sometimes you can find out that you're basically swimming upstream, and sometimes you find out that your counterpart is basically mandated to make certain decisions.
4. Is there any visible progress towards their goals? If they're struggling to make headway, and you can identify this, you can re-focus the discussion on making their pain point go away. (This depends heavily on what you do, but for my field, I can almost always find accurate information)
Ultimately, the prep work for a serious negotiation is what we internally call CIA work. It's a lot of intelligence gathering, asking (sometimes indirect) questions to get some insights, and doing the due diligence to ensure that we're as informed as we can be. Even with all that effort negotiations still fail sometimes. But if they fail, it's usually because the type of deal that would be struck wouldn't make sense in the first place.
Of course, this doesn't apply to hostage negotiations or to what I could only describe as 'toxic' scenarios.
> Being well-informed means going in with the best possible knowledge.
The assumption here is that you have access to that knowledge. In many cases, you just don't. You can't address it by emails or talking to anyone. All these scenarios aren't necessarily 'toxic' but common in daily life.
The assumption here is that you have access to that knowledge. In many cases, you just don't. You can't address it by emails or talking to anyone. All these scenarios aren't necessarily 'toxic' but common in daily life.
An amazing read - “Never split the difference. Negotiating as your life depended on it.”
Interesting approach which uses Emotion aware technics to get what you want. The main point - let your opponent to negotiate with themselves.
Interesting approach which uses Emotion aware technics to get what you want. The main point - let your opponent to negotiate with themselves.
That book was my first thought, once i read the parent comment you replied to. That comment pretty much exactly describes a very short summarized version of the approach that the book advocates for.
In being empathetic to their needs, make sure you're also being "empathetic" to your own needs. This means recognizing that their "need" to get their development work done without spending too much money on you is directly opposed to your need to have healthcare and money for rent, food, etc.
Obviously neither of these needs can be successfully ignored, but thinking of it this way helps me mitigate the guilt that comes with asking for more, without engaging the "winning" rhetoric even subconsciously.
Obviously neither of these needs can be successfully ignored, but thinking of it this way helps me mitigate the guilt that comes with asking for more, without engaging the "winning" rhetoric even subconsciously.
>be prepared to walk away
Like everything, it depends on the situation. But this seems to be key to me. Most people seem to walk in with expectations of leaving with something. If you're not willing (or able) to walk away, you're at some kind of disadvantage.
Like everything, it depends on the situation. But this seems to be key to me. Most people seem to walk in with expectations of leaving with something. If you're not willing (or able) to walk away, you're at some kind of disadvantage.
Yes you should take good notes, but in my experience if your counterparty isn't documenting their offer and concessions as a matter of course, they are lying and trying to trying to scam you.
This may be good for long term business deals but not optimal for software engineers salary negotiations. Considering the pace of job change, its optimal to take the hard negotiations.
This matches my experience perfectly, both in salary and contract negotiations. You get a long way with smile and a focus on the core: We both want to do something together.
> We don't allow you to work on your own projects while working for us
"Completely unacceptable. Im a free soul and I demand my freedom!"
Compared to
> We don't allow you to work on your own projects while working for us
"I perfectly understand, no need to invite competition or leak ideas, however in my experience you'll actually benefit from XYZ and I'd be happy to ..."
My intuition is, that as long as the talk is progressing in a pleasant manner, you're inching towards your goal.
> We don't allow you to work on your own projects while working for us
"Completely unacceptable. Im a free soul and I demand my freedom!"
Compared to
> We don't allow you to work on your own projects while working for us
"I perfectly understand, no need to invite competition or leak ideas, however in my experience you'll actually benefit from XYZ and I'd be happy to ..."
My intuition is, that as long as the talk is progressing in a pleasant manner, you're inching towards your goal.
Unless they use your easy going cooperativeness to run you in circles, endlessly delaying something they don't want to happen. Or constantly delivering only a token amount of their side of any compromise deal to cause re-compromises etc.
Sometimes soft negotiations have to turn to hard negotiations. In fact, I would argue that the potential to turn into a hard negotiation - but not yet being such - is a key factor in making soft negotiations work.
Sometimes soft negotiations have to turn to hard negotiations. In fact, I would argue that the potential to turn into a hard negotiation - but not yet being such - is a key factor in making soft negotiations work.
In my experience if it's not a point they are actually flexible on they will 100% do this no matter how charismatic you try to be.
very true, being nice gets you very far but it can also lead to you turning into a doormat. The trick is seeing it coming and changing the discussion appropriately. I had a boss that was an expert at this, he was all smiles and sunshine with vendors until they started to take advantage. At that point, they found they were negotiating with a calculator on the sum of 2+2.
Speak softly and carry a big stick.
Sure, but in employment post salary negotiation your only (or at least biggest) big stick is leaving. For many people that's a... double edged stick, to stretch the analogy.
There's not many sticks to emolpy unless you're unionised or otherwise have strong networking in the company.
There's not many sticks to emolpy unless you're unionised or otherwise have strong networking in the company.
I've seen sales guys intentionally leak information to the competititon in order to try to push a company they were working for out of business so they could get out of their non-compete contract and go after more lucrative employment at a competitor. I've also seen them sabotage a company just out of spite.
Your biggest stick is actually flipping the table and doing something that seriously damages the company or puts it out of business. Comitting actual crimes like embezzlement, theft, or damaging company equipment for which you are not caught are also great sticks.
Of course, nobody likes to talk about that, they find it too high minded, but all to often that is what goes on behind closed doors. The root cause of it is a mal-formed, unfair compensation policy.
Classic example is Small business Sole Proprietorships where the ownership passes their purchases through the company and plays accounting games to hide profitability from their staff. The staff are always told "work harder to make the profits go up we'll reward you", nobody gets to see the balance sheet so the profit number they are given is fundementally hidden and there's no end of excuses as to why the business can't pay those market wages or big bonuses. Then one day the ownership sells, new ownership cleans house, and we repeat.
They'll negotiate just fine, make verbal promises, but at the end of the day there's a scam going on.
And when people feel scammed, then they do the aboved illegal\immoral crap and make the place a totally messed up place to work.
Your biggest stick is actually flipping the table and doing something that seriously damages the company or puts it out of business. Comitting actual crimes like embezzlement, theft, or damaging company equipment for which you are not caught are also great sticks.
Of course, nobody likes to talk about that, they find it too high minded, but all to often that is what goes on behind closed doors. The root cause of it is a mal-formed, unfair compensation policy.
Classic example is Small business Sole Proprietorships where the ownership passes their purchases through the company and plays accounting games to hide profitability from their staff. The staff are always told "work harder to make the profits go up we'll reward you", nobody gets to see the balance sheet so the profit number they are given is fundementally hidden and there's no end of excuses as to why the business can't pay those market wages or big bonuses. Then one day the ownership sells, new ownership cleans house, and we repeat.
They'll negotiate just fine, make verbal promises, but at the end of the day there's a scam going on.
And when people feel scammed, then they do the aboved illegal\immoral crap and make the place a totally messed up place to work.
Well, the company doesn't really have that many sticks either, once you are in.
They can fire you, and they can delay advancement.
(Btw, you have an implicit stick about not working with as much motivation.)
They can fire you, and they can delay advancement.
(Btw, you have an implicit stick about not working with as much motivation.)
This is something employers are terrible at understanding. Employees in professional roles have tremendous ability to waste employer resources or underdeliver value. Nickel-and-diming employees is self-destructive, unless the employer is excellent at hiring desperate weak-willed employees... like naive college students and people pinned under H1B.
I am not sure that is true. My most recent conversation with my boss' boss made it clear that he was concerned them not meeting my needs money-wise would result lower motivation. He made a whole speech about bringing his best every day and we were not there to discuss motivation.
Management is well aware of what might happen. Financial incentives, however, are aligned with keeping costs as low as possible. And you are seen as cost. Even when you bring money in.
That means unless you have an offer on the table, ability to waste time is a secondary consideration.
For the record, I agree about the ability to waste time. I don't agree with assessment that management does not get it. They just act in their own short term interest.
Management is well aware of what might happen. Financial incentives, however, are aligned with keeping costs as low as possible. And you are seen as cost. Even when you bring money in.
That means unless you have an offer on the table, ability to waste time is a secondary consideration.
For the record, I agree about the ability to waste time. I don't agree with assessment that management does not get it. They just act in their own short term interest.
> not working with as much motivation
That's the equivalent of hitting myself and my employer, just hitting them a little harder.
If I'm lazing around, I'm bored and not progressing as a developer. I don't know if you've ever had a job where you do nothing or very little, but it's torture. Plus, you run the risk of getting sticked right back for underperforming.
That's the equivalent of hitting myself and my employer, just hitting them a little harder.
If I'm lazing around, I'm bored and not progressing as a developer. I don't know if you've ever had a job where you do nothing or very little, but it's torture. Plus, you run the risk of getting sticked right back for underperforming.
Timing is critical. If you are crucial to a project and threaten to leave while deadline looms and cost the company couple of million - then they will be flexible.
Be careful with that though as it will only work once and you might not last long there after that.
While the company might give you what you ask for this one time, they will feel blackmalied and will see you as a flight risk, ready to leave for greener pastures at any moment anyway, so they'll prepare themselves by restricting your access to promotions, trainings and critical work so you don't pull that stunt again and slowly reduce its dependency on you and you could soon find yourself training your future replacements. It's all 101 in the HR handbook.
Try it, but only as long as you always have an exit planned.
While the company might give you what you ask for this one time, they will feel blackmalied and will see you as a flight risk, ready to leave for greener pastures at any moment anyway, so they'll prepare themselves by restricting your access to promotions, trainings and critical work so you don't pull that stunt again and slowly reduce its dependency on you and you could soon find yourself training your future replacements. It's all 101 in the HR handbook.
Try it, but only as long as you always have an exit planned.
> While the company might give you what you ask for this one time, they will feel blackmalied and will see you as a flight risk, ready to leave for greener pastures at any moment anyway, so they'll prepare themselves by restricting your access to promotions, trainings and critical work so you don't pull that stunt again and slowly reduce its dependency on you
This is a pretty reliable trope. I feel like I hear this every time someone mentions putting the screws to their employer. Yet I have yet to see it borne out by evidence.
It sounds scary. In practice I have never experienced it.
The reality is that institutional memory at most institutions is so fleeting that this above threat has never become an issue in practice.
Mind you in all cases I’ve always been prepared to walk, so that’s something to keep in mind, but I’ve never experienced worse treatment for leveraging what scraps I have. It’s pretty much been the opposite. Once I have that promotion by whatever means, magically I’m treated better. It has never failed.
This is a pretty reliable trope. I feel like I hear this every time someone mentions putting the screws to their employer. Yet I have yet to see it borne out by evidence.
It sounds scary. In practice I have never experienced it.
The reality is that institutional memory at most institutions is so fleeting that this above threat has never become an issue in practice.
Mind you in all cases I’ve always been prepared to walk, so that’s something to keep in mind, but I’ve never experienced worse treatment for leveraging what scraps I have. It’s pretty much been the opposite. Once I have that promotion by whatever means, magically I’m treated better. It has never failed.
> My intuition is, that as long as the talk is progressing in a pleasant manner, you're inching towards your goal.
Not in my experience. Plenty of people able to progress talk in super pleasant manner without moving from their original position. Or to pleasantly promis and then conveniently forget that. Or most often, to make it sound like they agree, make vague pleasant statements that mean nothing.
Not in my experience. Plenty of people able to progress talk in super pleasant manner without moving from their original position. Or to pleasantly promis and then conveniently forget that. Or most often, to make it sound like they agree, make vague pleasant statements that mean nothing.
This sounds like a process issue to me. If you document what was discussed as it happens ("Just to confirm, you're happy with X?) and have a record of that (actually recording a conversation, with everyone's approval of course) is a good way to keep everyone honest.
That's not to say you can't have a dishonest counterpart - they certainly do happen. But in my experience when there's an issue like you described above there is fault to be found on both sides of the table. Leaving your notes visible in some form during a chat is another way to solve this. By having it written and in plain view it suddenly becomes much harder for the other party to come back later and say 'well I didn't actually agree to...'
That's not to say you can't have a dishonest counterpart - they certainly do happen. But in my experience when there's an issue like you described above there is fault to be found on both sides of the table. Leaving your notes visible in some form during a chat is another way to solve this. By having it written and in plain view it suddenly becomes much harder for the other party to come back later and say 'well I didn't actually agree to...'
That requires power I don't have. And I can not reasonably demand to record conversations with local management. And no matter how much notes I write to myself, the management simply does not care, because I don't have power to force them to follow own words. Visible notes do nothing if couterpart does not mind being dishonest or worst treats notes is being rude. (Not working in that worst group anymore, but it played in dishonest way with multiple people.)
Dishonest people set up process and culture so that it is easy to be dishonest. They do happen quite often. And it is not fault of people who are being intentionally lied to.
Dishonest people set up process and culture so that it is easy to be dishonest. They do happen quite often. And it is not fault of people who are being intentionally lied to.
Clearly it's rather different to negotiate when you're in a symmetric relationship vs an asymmetric relationship.
What Proziam mentioned "[if] they don't take a fair deal when offered, be prepared to walk away" doesn't work if walking away means not eating for the next week, for example.
What Proziam mentioned "[if] they don't take a fair deal when offered, be prepared to walk away" doesn't work if walking away means not eating for the next week, for example.
[deleted]
I should have added a better explanation. Im not saying you shouldn't negotiate hard, Im saying keep a vibe of optimism and friendliness, remembering why you're there in the first place. Make sure every concession is written down and signed directly following the meeting. Be prepared to pull the plug if the negotation is not headed in the direction you want and dont be afraid to let the other party know if they're crossing that line where it's no longer an acceptable deal for you.
If a company ever told me I cannot work on other things in my personal time, I would promptly tell them to suck on a rock and walk out. You can't negotiate with asinine people/corporations with asinine policies. If they feel comfortable telling you what you can and cannot do on your own time, imagine what they feel comfortable telling you to do while you're working.
It's not as "asinine" as it seems at first glance.
https://www.joelonsoftware.com/2016/12/09/developers-side-pr...
https://www.joelonsoftware.com/2016/12/09/developers-side-pr...
Telling someone they can't do projects on their own time is a different question than the ownership of said projects.
For me trying to negotiate with people playing super hardball (ignoring social norms etc) makes me think they will not honour any agreements made. Because those rely on social norms too. Curse your sudden but inevitable betrayal etc.
Well, that will depend on your interpretation of their actions, your local or industry-specific norms, and the actual circumstances of the negotiation.
I have met tough negotiators who uphold their end of the deal just fine.
The people who let me down the most are those who do not even attempt to negotiate on my prices: usually they'll think about it way later, but still won't accept discounts, until they run out of budget. Then you're thinking to yourself “why did they undermine this whole thing by paying me more than they could afford, for something I was willing to negotiate on?”. Then they miss 20k in billing, and you break it off.
I have met tough negotiators who uphold their end of the deal just fine.
The people who let me down the most are those who do not even attempt to negotiate on my prices: usually they'll think about it way later, but still won't accept discounts, until they run out of budget. Then you're thinking to yourself “why did they undermine this whole thing by paying me more than they could afford, for something I was willing to negotiate on?”. Then they miss 20k in billing, and you break it off.
Which is why you'd want to contractualize agreements. Sounds like you're, naturally, wary of entering into a gentleman's agreement with someone you don't feel is a gentleman.
Contracts are largely unenforceable in any real-world way. If the counterparty uses dirty tricks in the negotiation process, expect dirty tricks in the following of the contract is my experience.
Sounds like a bad contract
The contract could be perfectly formed, and still unenforceable.
At the end of the day, it's a piece of paper. Enforcing it in a civil court will take years, if not decades and costs tens of thousands if not hundreds of thousands of dollars in legal fees. Most people don't have the time or the money to do this, so it ends up "settling", often times with arbitrary fairness.
Settlement is more a game of "who can do what to whom".
At the end of the day, it's a piece of paper. Enforcing it in a civil court will take years, if not decades and costs tens of thousands if not hundreds of thousands of dollars in legal fees. Most people don't have the time or the money to do this, so it ends up "settling", often times with arbitrary fairness.
Settlement is more a game of "who can do what to whom".
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My approach to negotiations is described in the book "Never Split the Difference" by Chris Voss.
If you want to share: what were some insights you gained from the book?
I considered reading it, but then I read a review that says that although it’s useful, it presents a few quite manipulative tactics:
“A lot of what affects how much you enjoy these books is, again, how self aware you are or how much consideration you've given to how you talk to people and the best way to get what you want from others. If you already easily have any easy time convincing people, or have thought about it and are self aware of how you behave and talk to others then I don't think any of these things are going to be surprising or helpful but if you haven't ever actually considered the way you interact with people then maybe this will be an eye opening book for you. Personally I think I've always been a little manipulative so I wasn't all that impressed. The writing was average also so the books clear and easy to read but I wasn't impressed by the writing either.”
Source: https://www.goodreads.com/review/1841965174/
I considered reading it, but then I read a review that says that although it’s useful, it presents a few quite manipulative tactics:
“A lot of what affects how much you enjoy these books is, again, how self aware you are or how much consideration you've given to how you talk to people and the best way to get what you want from others. If you already easily have any easy time convincing people, or have thought about it and are self aware of how you behave and talk to others then I don't think any of these things are going to be surprising or helpful but if you haven't ever actually considered the way you interact with people then maybe this will be an eye opening book for you. Personally I think I've always been a little manipulative so I wasn't all that impressed. The writing was average also so the books clear and easy to read but I wasn't impressed by the writing either.”
Source: https://www.goodreads.com/review/1841965174/
I got the highest job-hopping % increase in salary by following the advice of this book. Using tactics such as "Saying no without saying no" and "Start with your number $X+80%, then say no without saying no each time going down by 15-20% in 3 steps. At the last step, give a non-round number that seems to be your lowest threshold".
The book has further gems like
- Deadlines cut both ways. Never hide your deadline, as it will increase the chance of an impasse: the opponent will hold out for more while you will be pressured by the unspoken deadline.
- Never bluff. Be prepared to actually walk away from the table at any given time.
- If the other party thinks lowly of you, bring forth their worst fears. This allows them to see them through the glasses of logic instead of emotions. Once you diffuse their feelings in the open, they'll be more receptive to what you have to say.
The book is worth a read.
The book has further gems like
- Deadlines cut both ways. Never hide your deadline, as it will increase the chance of an impasse: the opponent will hold out for more while you will be pressured by the unspoken deadline.
- Never bluff. Be prepared to actually walk away from the table at any given time.
- If the other party thinks lowly of you, bring forth their worst fears. This allows them to see them through the glasses of logic instead of emotions. Once you diffuse their feelings in the open, they'll be more receptive to what you have to say.
The book is worth a read.
"Start with your number $X+80%, then"
Norwegian here: I've previously read self-improvement books written by Americans that state advice that gives me the same vibes as this one, specifically a feeling of this being a very bad idea. I'm almost certain that starting a salary negotiation with a demand 80% higher than my actual goal would either get me laughed out of the room, or a polite "you're too expensive for us, goodbye".
I get the impression there's a major cultural aspect to this, with negotiation tactics that are considered acceptable or not in each culture. Does anyone have any experiences confirming or denying this? I don't think I'll stake my reputation in this small-ish city on trying this out.
Norwegian here: I've previously read self-improvement books written by Americans that state advice that gives me the same vibes as this one, specifically a feeling of this being a very bad idea. I'm almost certain that starting a salary negotiation with a demand 80% higher than my actual goal would either get me laughed out of the room, or a polite "you're too expensive for us, goodbye".
I get the impression there's a major cultural aspect to this, with negotiation tactics that are considered acceptable or not in each culture. Does anyone have any experiences confirming or denying this? I don't think I'll stake my reputation in this small-ish city on trying this out.
It's supposed to be outrageous. This is called "anchoring" so when the counterparty brings you down to your desired salary he thinks "he won". That way, they aren't mad and return to the guy for another negotiation where, presumably, he does it to you again.
Not sure if this is a cultural thing, but from my experience most salespeople and lawyers in america employ this tactic (and many others like htem!), so I recommend everyone on HN read these books to know when you're being taken advantage of. Merely identifying the tactic often neurtralizes it in any real world way.
Not sure if this is a cultural thing, but from my experience most salespeople and lawyers in america employ this tactic (and many others like htem!), so I recommend everyone on HN read these books to know when you're being taken advantage of. Merely identifying the tactic often neurtralizes it in any real world way.
The author addresses this point. Giving a single number may indeed be "harsh" in some occasions. His suggestion is to instead use a range, which makes you seem more reasonable and won't put the other person on the defensive. I actually did use a range, forgot to mention that in my original comment.
For example, you can phrase it as "At top places like $ExampleOne, $ExampleTwo, people in my position earn between $X+80%, X+100%". You then go from there. You can also lower the start of the range or increase the end of the range, make that gap wider. Every employer will go to the initial range given and try to bring you down on it because of "excuses". you are allowed to go down up to 3 times by 10-15%, with the "say no without saying no" technique. At the end, you give the non-round number (e.g 134,567$ per year) which gives the impression you put some thought into it.
Another thing he mentioned is that money is not everything. Ask for more days or perks. If they can't meet you on those they might instead bump your salary.
It's also about putting in a bit of theatrics. For example, when I gave my final number for my salary I paused and said "give me a moment" and scribbled something on a piece of paper. After that I said my non-round number. It worked.
No technique is fool-proof. All it takes though is for it to work most of the time.
For example, you can phrase it as "At top places like $ExampleOne, $ExampleTwo, people in my position earn between $X+80%, X+100%". You then go from there. You can also lower the start of the range or increase the end of the range, make that gap wider. Every employer will go to the initial range given and try to bring you down on it because of "excuses". you are allowed to go down up to 3 times by 10-15%, with the "say no without saying no" technique. At the end, you give the non-round number (e.g 134,567$ per year) which gives the impression you put some thought into it.
Another thing he mentioned is that money is not everything. Ask for more days or perks. If they can't meet you on those they might instead bump your salary.
It's also about putting in a bit of theatrics. For example, when I gave my final number for my salary I paused and said "give me a moment" and scribbled something on a piece of paper. After that I said my non-round number. It worked.
No technique is fool-proof. All it takes though is for it to work most of the time.
It is 80% less than you minimum not your goal - but the 80% does have to be a believable salary.
Great summary, I have watched several Chris Voss talks/videos but some of what you shared is new. Can you give some examples of "saying no without saying no"?
Depends on what you mean by bluff.
Eg you can pretend that you have another offer. But if someone calls your bluff, you shouldn't come back begging. If you need to, don't bluff.
Eg you can pretend that you have another offer. But if someone calls your bluff, you shouldn't come back begging. If you need to, don't bluff.
Exactly. If someone calls your bluff, you should be able to back it up.
My point was a bit subtler: you can pretend that you have an outside offer of a million dollars from company B when you are talking to company A. But when company A then refuses to pay up to you bluff, I say, "Well, tough luck, your bluff got called."
There's nothing backing up the bluff, apart from your willingness to walk away.
There's nothing backing up the bluff, apart from your willingness to walk away.
As a man who knew nothing about negotiation, "start with "no"" is a great tactic I never thought about before.
I think the review actually says that for people who are naturally manipulative the book doesn’t necessarily add much; which I can imagine.
The book actually explains quite well which negotiation tactics don’t work when faced with life and death situations (hostage negotiation) and goes on to explain which ones do and why they actually work better in everyday negotiations as well.
The book actually explains quite well which negotiation tactics don’t work when faced with life and death situations (hostage negotiation) and goes on to explain which ones do and why they actually work better in everyday negotiations as well.
As an outsider/beginner to negotiation... The book was amazing.
I recommend the audio as Voss narrates... And voice is important.
I recommend the audio as Voss narrates... And voice is important.
> Most business books push a singular narrative around negotiations: Go hard or go home. The advice is tied to the idea that the negotiation table is a place of conflict where one party must best the other.
Good business texts haven't emphasized this approach for a long time. The prevailing negotiation methodology has been "grow the pie" for a long time. In this approach, you're not trying to claim more of the pie directly, but rather make the pie bigger and then claim a larger overall slice.
However, this article is a good reminder that an overly strong negotiating strategy can create friction later in the deal. That's good advice, and it shows the value of good business development.
Good business texts haven't emphasized this approach for a long time. The prevailing negotiation methodology has been "grow the pie" for a long time. In this approach, you're not trying to claim more of the pie directly, but rather make the pie bigger and then claim a larger overall slice.
However, this article is a good reminder that an overly strong negotiating strategy can create friction later in the deal. That's good advice, and it shows the value of good business development.
> where one party must best the other ... you're not trying to claim more of the pie directly, but rather make the pie bigger and then claim a larger overall slice.
If you're claiming more of the pie, but the pie isn't really bigger, you're just indirectly attempting to best the other. It's the same outcome, but with a different approach couched in friendlier wording.
If you're claiming more of the pie, but the pie isn't really bigger, you're just indirectly attempting to best the other. It's the same outcome, but with a different approach couched in friendlier wording.
> This is potentially less important if you negotiate over the price of a sofa on Craigslist.
Perhaps off topic, but speaking of sofas and CraigsList no one should buy a new sofa without checking a few weeks on CraigsList's free section. At least in New York City, every day sees plenty of new ones for free that will otherwise go to landfills even if like new.
My two sofas came free from people in my building, both like new.
Perhaps off topic, but speaking of sofas and CraigsList no one should buy a new sofa without checking a few weeks on CraigsList's free section. At least in New York City, every day sees plenty of new ones for free that will otherwise go to landfills even if like new.
My two sofas came free from people in my building, both like new.
Getting a sofa from people in the building or friends is less risk than craigslist. I know someone who got bedbugs from a sofa on craigslist. So there’s a slight risk right there
I'm actually looking to unload a sofa right now. If anyone is interested in the Cincinnati area.
Huge concern about bedbugs and mold.
Most negotiation strategies attempt to optimize deal terms. This article makes the point that when post-deal relationships are important, it is better to optimize a combination of deal terms and quality of the post-deal relationship. It concludes that a softer approach better achieves this broader goal by yielding a much better relationship even though it might be at the cost of worse deal terms.
I largely agree with this, although the researchers omit the important tactic of developing an acceptable alternative deal with a counter-party's competitor and then focusing negotiation on comparisons to it. Done well, you can still drive a hard bargain in a soft way, while maintaining the relationship by diverting the counter-party's resulting negative feelings away from you and towards the competitor.
I largely agree with this, although the researchers omit the important tactic of developing an acceptable alternative deal with a counter-party's competitor and then focusing negotiation on comparisons to it. Done well, you can still drive a hard bargain in a soft way, while maintaining the relationship by diverting the counter-party's resulting negative feelings away from you and towards the competitor.
The only time I negotiated aggressively was with someone who couldn't "read the air" about their prices.
We've had a long relationship since, and still this person can't "read the air" about pricing.
Ironically, by the end of the whole process, I realized this person could probably lower their prices by about 5-10% if they just paid closer attention to their bills and operational efficiency.
We've had a long relationship since, and still this person can't "read the air" about pricing.
Ironically, by the end of the whole process, I realized this person could probably lower their prices by about 5-10% if they just paid closer attention to their bills and operational efficiency.
What in the world does "read the air" mean? Is it an uncommon way to say something like "read between the lines" or is it something else entirely?
There was a hacker news article about it last week. It's similar to "read between the lines."
In this case, I was working with a general contractor to build a home, and I kept pointing out that "newish" houses (10-20 years old) in the area were significantly cheaper, and that his stock of new homes was sitting unsold for a very long time.
Throughout the process:
1 - He sent me to a plumbing and lighting store where everything affordable was something that would go in a very cheap apartment. Everything else was absurdly expensive. We ordered everything off of Amazon for a reasonable cost.
2 - He tried to pass a very large, and obvious, billing error from the electric company off on me
3 - At times he would hint to me about how much money he was loosing floating interest on his unsold homes. These homes had the high-end fixtures where he could have saved about $10-20,000 just buying "nice" stuff at Amazon.
4 - When the house was done, a family architect looked at my basement and told me just how over-built my structural members are.
In this case, I was working with a general contractor to build a home, and I kept pointing out that "newish" houses (10-20 years old) in the area were significantly cheaper, and that his stock of new homes was sitting unsold for a very long time.
Throughout the process:
1 - He sent me to a plumbing and lighting store where everything affordable was something that would go in a very cheap apartment. Everything else was absurdly expensive. We ordered everything off of Amazon for a reasonable cost.
2 - He tried to pass a very large, and obvious, billing error from the electric company off on me
3 - At times he would hint to me about how much money he was loosing floating interest on his unsold homes. These homes had the high-end fixtures where he could have saved about $10-20,000 just buying "nice" stuff at Amazon.
4 - When the house was done, a family architect looked at my basement and told me just how over-built my structural members are.
From a quick search, it appears to be a Japanese idiom that means the same thing as "read the room". To assess a social situation.
Maybe something like "read the room"? Native English speaker here and I'm just as baffled
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There’s a service in Uganda called boda boda. Basically they are guys who ride small motorbikes and offer rides to passengers.
When they see me, a white man, they like to charge a very high price. Sometimes I can get very frustrated and want to “win” the negotiation. But then I think about how miserable the next 30 minute ride may be, and I also think about how dangerous it may be. If he feels frustrated or angry with the result of the negotiation, it may affect his driving, and it is already a highly dangerous activity to start.
So, I often negotiate softer with them. It’s one of the reasons I like SafeBoda and Uber, because then the price is set by the app and I don’t have to have the potential argument with the driver. So during the ride I have great relaxed conversation with them and then when I arrive, since I know the price is typically too low, I give them a good tip, and everyone seems happy.
So two thumbs up for softer negotiations with services.
When they see me, a white man, they like to charge a very high price. Sometimes I can get very frustrated and want to “win” the negotiation. But then I think about how miserable the next 30 minute ride may be, and I also think about how dangerous it may be. If he feels frustrated or angry with the result of the negotiation, it may affect his driving, and it is already a highly dangerous activity to start.
So, I often negotiate softer with them. It’s one of the reasons I like SafeBoda and Uber, because then the price is set by the app and I don’t have to have the potential argument with the driver. So during the ride I have great relaxed conversation with them and then when I arrive, since I know the price is typically too low, I give them a good tip, and everyone seems happy.
So two thumbs up for softer negotiations with services.
I know negotiation is like a sport in some cultures, but I find it needlessly antagonizing. I'd rather pay extra to just not deal with it, and find other means of getting said product/service in the future.
Come on people now, smile on your brother, everybody get together, try and love one another, right now...
Come on people now, smile on your brother, everybody get together, try and love one another, right now...
The way I see it you are paying Uber to do the hardball negotiations for you and then you tip. Uber is certainly not soft and is the bigger part of the equation.
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When I started at Uber back in early 2014, I didn't negotiate the offer at all. It seemed reasonable, so I accepted. Maybe I could have gotten more - but accepting has been, by far, the best decision of my career.
A couple of years ago, we purchased a used Tesla (2014 MS P85D+) from someone on Craigslist. The estimated value of the car in a private sale was $48-53K on TrueCar, and the buyer was asking $50K. We paid $50K. We haven't had any problems with the car, and ended up having some roof racks/equipment given to us for free later on by the seller because he didn't need them anymore. We even found out he had prepaid the next 5 years of maintenance with Tesla.
We just went under contract on a new house, and we negotiated the deal without a real estate agent representing us. This was the extent of the negotiation:
Also, the builder built his own house 20 feet away. We're going to be neighbors with the person we were negotiating with, and it would be better to be on good terms with them than to simply extract the maximum amount of value from them in the transaction. If anything in the house needs to be fixed in the future that isn't technically covered in the builder's warranty, they're more likely to work with us to fix it or help us get it fixed at a low cost. Plus they're our only neighbor and we're probably going to invite them over for dinner every now and then.
However, as much as I'm a fan of win/win dealmaking, I find it only works well when the other party is interested in a win/win. The first thing I do when I approach the negotiating table is assess whether the other party is a smarmy Glengarry Glen Ross/Art of The Deal jerk who is trying to rip me off. My solution to negotiating with one of these people is simple - don't. Just walk away. Leave the wolves to bite at each others' throats and find someone else to work with. You can only get ripped off if you put yourself into a situation where the people you are dealing with are trying to rip you off.
A couple of years ago, we purchased a used Tesla (2014 MS P85D+) from someone on Craigslist. The estimated value of the car in a private sale was $48-53K on TrueCar, and the buyer was asking $50K. We paid $50K. We haven't had any problems with the car, and ended up having some roof racks/equipment given to us for free later on by the seller because he didn't need them anymore. We even found out he had prepaid the next 5 years of maintenance with Tesla.
We just went under contract on a new house, and we negotiated the deal without a real estate agent representing us. This was the extent of the negotiation:
- Us: We'll pay 6% below list, but you can save 3% because we don't have an agent.
- Them: We'll accept 5% below list.
- Us: Ok.
Also, the builder built his own house 20 feet away. We're going to be neighbors with the person we were negotiating with, and it would be better to be on good terms with them than to simply extract the maximum amount of value from them in the transaction. If anything in the house needs to be fixed in the future that isn't technically covered in the builder's warranty, they're more likely to work with us to fix it or help us get it fixed at a low cost. Plus they're our only neighbor and we're probably going to invite them over for dinner every now and then.
However, as much as I'm a fan of win/win dealmaking, I find it only works well when the other party is interested in a win/win. The first thing I do when I approach the negotiating table is assess whether the other party is a smarmy Glengarry Glen Ross/Art of The Deal jerk who is trying to rip me off. My solution to negotiating with one of these people is simple - don't. Just walk away. Leave the wolves to bite at each others' throats and find someone else to work with. You can only get ripped off if you put yourself into a situation where the people you are dealing with are trying to rip you off.
One of the key reason these negotiations are so messed up is that often people negotiate who are not directly part of the post negotiation relationship aka. purchasing and sales vs. business and service delivery.
This advice applies well to commercial landlord-tenant relationships.
As an owner, if I negotiate super hard, the tenants will be resentful, and will damage the space, pay late, and cause no end of trouble.
As an owner, if I negotiate super hard, the tenants will be resentful, and will damage the space, pay late, and cause no end of trouble.
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Shop around and understand the underlying market. Find the counterparty that undervalues the item under negotation most, you profit.
This is such an important concept for negotiations of all sorts. If you are negotiating the hard way, then people are going to be put off from interacting with you in the future.
There is a social element to all relationships, and the Trump-style win or go home strategy only works if you have massive leverage, and even then it will leave a sour taste in the mouth of the other party.
You want the other party to feel satisfied with their part of the deal. Not just because it's good for business (which it is), but because we are human beings and we should not be trying to squeeze every last penny out of each other.
There is a social element to all relationships, and the Trump-style win or go home strategy only works if you have massive leverage, and even then it will leave a sour taste in the mouth of the other party.
You want the other party to feel satisfied with their part of the deal. Not just because it's good for business (which it is), but because we are human beings and we should not be trying to squeeze every last penny out of each other.
If you want to break a relationship, then an initial hard negotiation followed by softer ones also help a lot.
Will somebody tell Donald Trump - Art of the Deal is classic hard win/lose negotiating. Silicon Valley was built on win/win negotiating
And he won, the whole enchilada, at least in his own terms. While those he was negotiating with have decidedly lost, in both his terms and their own. There is every indication that this will continue.
I believe that this will inspire a great many people to this negotiating style for many years to come.
I believe that this will inspire a great many people to this negotiating style for many years to come.
Read "Secrets of Power Negotating". It's filled with manipulative tactics designed to mislead the other party into thinking "they won". This book was un-ironically recommended at HN startup school like 10 years ago. I forgot the speakers' name though. This made me question the ethics of venture capitalists.
My basic rules for all negotiations:
1. Be useful to your counterparty. (Simply, this means to be well-informed and listen intently. Present any information they need as they need it. Don't be the type to 'bury' the opposition in paperwork when you know they're looking for a few specific details.)
2. Be empathetic to their needs. (Everyone has a reason to show up to the table. If you can identify, with absolute clarity, what they need - you can help them get there. In return, it's often MUCH easier to get what you need.
3. Don't try to win. (The extra 1-5% you might gain in most cases is outweighed by the negativity of the event. If you're negotiating with a future employer, vendor, or potential client, then the value of having them actually want to talk to you is greater than the difference most of the time.)
And lastly, #4 - If your counterparty plays hardball with you, give them a truly fair offer that addresses their needs. If they don't take a fair deal when offered, be prepared to walk away.