K

 

Krunch Tactic

 

"You've got to do better than that."" This puts pressure on the other party without elaborating on ""how much better."" Often this tactic by a participant to test the limits of the other party."

 

L

 

Last and Final Offer

 

"When someone gives you a ‘last and final offer,’ don’t accept it at face value. Test it. It could be they are simply asking you to play ‘chicken’ to test your resolve. When you are given a last clear chance to take a final offer or risk the consequences, you are in this ‘chicken’ situation. You can usually keep talking. But not always!"

 

Leaking Information

 

Let the other side ‘discover’ secret information that will change their perceptions or expectations. For some reason humans trust what we learn about the other party by coincidence more than what the other party actually is telling us about themselves. See ‘Planted Information.’

 

Least Acceptable Result

 

The bottom of the range of acceptable outcomes is called your Least Acceptable Result. The highest point in the whole range of potential outcomes at which you expect to meet all of your goals is called your Maximum Supportable Position. See Settlement Range.

 

Least Effort Principal

 

People prefer to make their lives easier. There is nothing new or brilliant about this least effort principal but it is quite useful in a negotiating context. People would rather say ‘yes’ to a possible deal than complicate their lives by negotiating longer for a better deal. Buyers don’t really want to look for new sources if they can find reasons to stay with old sources. Neither party to a negotiation wants to endure the stress of further negotiation or the work it takes to start over again with someone else. What’s really important is the party that is willing to go beyond ‘least effort’ gains significant negotiating power.

 

Leaving Money on the Table

 

A negotiation where the settlement is less optimal for both parties. Both parties fail to discover and maximize opportunities to capitalize on common interests.

 

Leave Yourself Room to Negotiate

 

Both Buyers and Seller’s often ask for more than they need. Their intention is to lower the expectations of the other party and gain a concession at the start of the negotiation without having to make a concession in return. Opening offers should always be justified with reasons and/or documentation. This initiates the dialogue of the negotiation that is essential to a satisfactory outcome. Don’t be ridiculous - See ‘Extreme Offers.’ Understand that there are many cultural aspects to this issue. The cultural background of each participant often dictates how extreme opening offers are. Learn to adjust your negotiations accordingly.

 

Lie-for-a-Lie

 

A negotiator suspects the other negotiator is lying and retaliates with lies of their own. A negative use of Quid-Pro-Quo

 

Light-of-Day Test

 

An ethical test. Would you be completely comfortable if your actions and statements during this negotiation were printed in full on the front page of the local newspaper or were reported on the TV news? See Front Page Test

 

Limiting Your Authority Technique

 

"Negotiators often find it useful to limit their own authority. This provides opportunities for a negotiator to gather information, test the other side’s positions, and explore potential concessions prior to being pressured into making a decision. See ‘Mandated Authority.’"

 

Limits

 

"Limits can involve time, money, authority, capacity, or expertise. “I can’t agree to anything longer than 90 days.” “We only have $$$ to spend.” (see Bogie) “I don’t have the authority to sign this.” Limits provide opportunities for discovery. Options that might be available considering your limits. Limits can be real or imaginary. "

 

Linking

 

"Make your agreement contingent upon the other side agreeing to another, maybe unrelated issue. See ‘Asking in Return’ and ‘Tying A String.’"

 

Logrolling

 

When negotiators offer trade-offs or concessions to capitalize on different magnititudes of preference. You prefer an office with windows; the other person prefers a large office. So you take the small corner office with windows and the other person takes the large center office with no windows. See Circular Logrolling and Reciprocal Logrolling.

 

Lose-Lose Negotiation

 

A negotiation where the settlement is less optimal for both parties. Both parties fail to discover and maximize opportunities to capitalize on common interests.

 

Low Ball

 

"Buyers often start demanding low prices, or stating that they only have this to spend, just to test the flexibility of a seller and to set the seller’s expectations. "

 

Low Balling Maneuver

 

"Some sellers are experts in hiding things. This maneuver starts by offering products or services at a very low price relative to competition. Once they gain agreement with the pricing parameters, the person low-balling will reveal hidden costs and state that these are not part of the deal."

 

Lying

 

A negotiator needs to be aware of signs of deliberate lying. It helps to evaluate the other side by asking a few discovery questions where you already know the answers. You can learn a lot by their reaction to these probes and the accuracy of their responses.

 

M

 

Make Them An Offer They Must Refuse

 

"A negotiator starts off the negotiation by asking for a very large concession or favor from the other party – one that the other party is almost certain to refuse. When the request is refused, the negotiator makes a much smaller request, which was the option they wanted all along. Begin negotiations with high aspirations. A high aspiration creates a contrast effect so that the other party views any following request that is less extreme to be more reasonable. See Aspiration Level and Rejection/Retreat Tactic."

 

Mandated Authority

 

Claiming that final approval can only be provided by a higher authority. Having ‘Mandated Authority’ can be useful when there is a great deal of risk in the negotiation and you may discover reasons to try to delay or slow down the negotiation process. See ‘Limiting Your Authority.’

 

Maximum Supportable Position

 

The highest point in the whole range of potential outcomes at which you expect to meet all of your goals. The bottom of the range of acceptable outcomes is called your Least Acceptable Result. See Settlement Range.

 

Merit Based Rule

 

Each participant shares the negotiation pie based upon the various contributions and inputs they have made to the specific business situation. Those who have contributed more get more. Also known as the Equity Rule.

 

Message Tuning

 

"Messages can be sent in a variety of ways and if not careful, can lead to message distortion. Message turning refers to modifying the message each specific recipient to best suit the new recipient."

 

Mirror and Match Technique

 

"We tend to like people whom we perceive to be similar to ourselves. Negotiators are more likely to make concessions with people they know and like. Some negotiators get positive results by purposely making themselves ‘similar’ to the other party: body posture, mood, verbal style, and dress. See Similarity Attraction Effect"

 

Missing Person Maneuver

 

"The person with final authority disappears just as the parties reach agreement. Nothing can be done until he or she returns, and nobody is quite sure when that will be. The side that uses the ‘missing person’ maneuver is buying time to see if they can get a better deal from someone else before they finalize the agreement. Meanwhile you wait for the missing person to return."

 

Moral Appeal

 

The other party will frame their appeal as being the ‘fair’ or ‘right’ way. When you disagree you run the risk of being ‘unfair’ or ‘wrong.’

 

Multi-Party Negotiation

 

A negotiation that involves more than two individuals.

 

N

 

Name Dropping

 

Also referred to as ‘Association.’ We do business with a VIP in an important company. Pictures often are displayed of them shaking hands with important people. Plays upon the human tendency of wanting to do business with people who are well connected.

 

Needs Based Rule

 

The distribution determined by the negotiation should be proportional to the needs of each negotiator.

 

Negative Bargaining Zone

 

The most a buyer is willing to pay is less than the least the seller will accept. There is no ‘overlap’ of acceptable outcomes. Each party’s BANTA provides a better result than reaching agreement. See Positive Bargaining Zone

 

Negotiation

 

"To confer, bargain, discuss or exchange issues or matters with another with a view to making arrangements, settling differences, resolving problems or reaching agreement on any subject of common concern."

 

New Information

 

"Bringing new information, new benchmarks or new specifications into the negotiation, can sometimes help bring the parties closer together and can create better outcomes."

 

New Issue

 

The introduction of a new issue that has not been discussed. Sometimes used to throw the other side off balance.

 

New Player

 

New people are introduced into the negotiation that then change the rules or modify what has already been agreed to. Can also be used to help break a Deadlock

or Impasse.

 

Nibbling

 

"Ask for one last small concession just before signing. There is a strong desire by the other party to grant this final concession just to get the agreement finalized. Nibbling also happens after agreement has been reached. New issues come up, changes are needed, and new people become involved. Each provides an opportunity for someone to ‘nibble’ on the Agreement."

 

Nickel-and-Diming

 

Asking for ‘just one more thing’ after both parties are presumed to be in agreement. See Nibbling.

 

No Authority

 

Refusing to make a decision or come to an agreement because you are not allowed to. When you limit your own authority you gain flexibility in the negotiating

process.

 

Nonverbal Behaviors

 

"Much research has been done that demonstrates that nonverbal communication may be more significant than verbal communication. In one study 35% of the message in conversations was conveyed by the spoken work while the other 65% was communicated nonverbally. In the Albert Mehrabian study, conducted at UCLA. The breakdown was as follows: 7% of the meaning is derived from the words spoken; 38% from tone of voice, loudness, and other aspects of how things are said; and 55% from facial expressions and body language. There is much debate on this subject and the percentages, but most agree that how things are said is often more important than what is said."

 

O

 

Offer They Must Refuse

 

"A negotiator starts off the negotiation by asking for a very large concession or favor from the other party – one that the other party is almost certain to refuse. When the request is refused, the negotiator makes a much smaller request, which was the option they wanted all along. Begin negotiations with high aspirations. A high aspiration creates a contrast effect so that the other party views any following request that is less extreme to be more reasonable. See Aspiration Level and Rejection/Retreat Tactic."

 

Organizational Mode of Negotiating

 

"Seldom is there a negotiation where only two parties influence the outcome. Each participant in a negotiation has a host of ‘organizational’ stakeholders who, while not physically at the negotiating table, impact the outcome of the negotiation. They include work associates, executives, managers the finance and legal departments, engineers, manufacturing, etc. etc. etc. Anyone that is impacted by the results of the negotiation is a stakeholder that must be considered. A skilled negotiator will address the organizational needs and organizational pressures on both sides of the negotiation. They impact the outcome of the negotiation and have a large part to play on the long-term success of any agreements."

 

Overwhelm

 

Provide the other side too much information or make too many requests.

 

P

 

Padding

 

Insert items/issues that are relatively unimportant to you into the negotiation and treat them as ‘essential.’ Use these items as trade-off concessions to gain agreement on items you really do value. See ‘Straw Issues.’

 

Peace By Piece Strategy

 

"When two parties do not trust each other enough to agree on all issues, they have an alternative. They can settle on a ‘peace-by-piece’ strategy. The two reach agreement on low-risk matters, leaving difficult issues to simmer. If, over time, things work out satisfactorily, they tackle the tougher issues. ‘Peace-by-piece’ gives each party a chance to test the intentions and performance of the other without getting hurt too much. This strategy is often used by buyers dealing with new vendors. Instead of giving them a large order, the buyer gives them a series of smaller ones. If all goes well, the buyer expands the order. Each success serves to broaden the base of future agreement."

 

Perceptual Contrast

 

"When a negotiator makes an outlandish initial request, they are more likely to secure agreement to subsequent, smaller request. This is based upon principles of perceptual contrast. If a person lifts a heavy object, sets it down, and then lifts a light object, the person will perceive the light object to be much lighter than it actually is. An irrational negotiator who calms down following a wild display of emotion may get what they want. See Door-In-The-Face-Technique"

 

Personal Mode of Negotiating

 

"Negotiators often approach a negotiation with their focus on dollars, goods, or services – the tangible aspects of the bargain. Good negotiators realize there are intangible factors, personal in nature, that also impact a negotiation. These personal factors are sometimes hard to identify, unless your relationship with the other party is very good. You will have a more productive negotiation if you invest some time to get to know the other person better and understand some of their personal motivations. "

 

Pie Expansion

 

"There are generally several dimensions and several issues at play in any negotiation. Wise negotiators explore all the issues and dimensions of a negotiation to find trade off areas and ways to enhance the ultimate agreement for all parties. Creative trade offs between the different assets, needs and preferences each party has are diligently examined to find ways to build new value. When the pie is successfully expanded, both parties leave with new value that was created purely from the process of negotiating."

 

Pie Slicing

 

"Used to refer to a negotiation where the resulting agreement ‘divides the pie’ with each participant taking their share. Since there is a fixed ‘pie’ what one party gets comes at the expense of the other party. In a broader perspective, every negotiation has a distributive component. Negotiations referred to as a “Win-Win Negotiation,” “Both-Win Negotiation,” “Value Creation Negotiation,” or “Integrative Negotiation,” all create new value (i.e. a larger pie), but each ultimately ends up with a distributive event that determines how the pie is sliced. Generally it is not 50-50. See Distributive Negotiating"

 

Planning Purpose Trap

 

"One party tells the other that, for planning purposes, just give me a rough idea of what this will cost. They emphasize that the estimate need not be exact. “Don’t worry, we won’t hold you to it but we must have some idea of what we are getting into.” Trying to be helpful, you fall into the trap. Instead of being careful in your calculations, you make a quick estimate, generally on the low side because that is what they think they want to hear. Then, later when a formal quote is requested, you suddenly realize that the ‘planning purpose’ number has become an anchor point in the negotiation. Recognize that a ‘planning purpose estimate’ is likely to be more binding than it looks."

 

Planted Information

 

Let the other side ‘discover’ secret information that will change their perceptions or expectations. For some reason humans trust what we learn about the other party by coincidence more than what the other party actually is telling us about themselves. See ‘Leaked Information.’

 

Poker Face

 

Showing emotion provides information to the other side regarding your feelings regarding issues and can weaken your negotiating position. Maintain self control and resist the display of any emotion.

 

Position

 

A viewpoint or need that is defended by a negotiator.

 

Positive Bargaining Zone

 

The most a buyer is willing to pay is greater than the least the seller will accept. This ‘overlap’ becomes the positive bargaining zone where agreement is possible because each party can achieve a result that is better than their BANTA. See Negative Bargaining Zone

 

Power of Information

 

"Information regarding yourself and the other party(s) provide power to a negotiator. Collect and assemble information based upon what you know about of each party’s BATNA, positions, interests, needs, priorities, and key facts."

 

Power of Knowledge

 

"Knowledge regarding yourself and the other party(s) provide power to a negotiator. Collect and assemble information based upon what you know about of each party’s BATNA, positions, interests, needs, priorities, and key facts. The more you know about the other person’s costs, organization, business standing, and product the better you can negotiate. The more you know about the negotiating process the more power you have."

 

Power of Legitimacy

 

"Support your negotiating position with verifiable information, documents, policies, regulations, standard terms and conditions. This is a source of negotiating power and tends to hypnotize the other party into compliance. If you find legitimacy being used against you, test it. These things are more negotiable than they appear to be."

 

Power of Policies

 

See Power of Legitimacy

 

Power of Print

 

"If you have something printed (i.e. price sheet, purchasing policy, employment policy, discount policy, rental documents, regulations, legislation, etc) it appears to be more legitimate than if you only talk about the policy. This gives you more negotiating power. See Power of Legitimacy"]

 

Power of Risk Taking

 

Humans cherish security. We have a desire to avoid risk wherever possible. A negotiator who is willing to accept a greater burden of uncertainty with respect to reward or punishment enhances their negotiating power.

 

Power of Silence

 

"People talk too much. The less the other person knows about you, the better off you are. The more you know about them, the stronger your bargaining power. What you say and what you show may be used against you if it reveals your weaknesses. How much you choose to reveal is a matter of business judgment. Less is better than more in most cases.

 

Power of Time and Effort

 

Time and patience are sources of negotiating power. The party most constrained by time limits provides their opponent with a base of strength. The party most willing to work hard gains power.

 

Pre-Conditioning

 

"Information given to another party that tends to modify their expectations prior to entering the actual negotiation. A salesperson sends a news report on prices increases to pre-condition a buyer. The buyer, having read the news report, prepares themselves for a big jump in price. The buyer is relieved to see only a minor price increase. “It could have been a lot worse.”

 

Predictability of People

 

"People are generally predictable animals. For most of us there is a very good chance we will do tomorrow what we did yesterday. Look at a person’s history. When negotiating with someone, a careful study of their habits, temperament, opinions and values will reveal useful patterns. The personality traits of a person tend to guide their behavior. People react to frustration and stress in recognizable patterns. Some behave with patience, humor and creativity. Others are defensive and unrealistic and make excuses, bury facts forget, blame others, become hostile, withdraw or become emotional under stress. If we know what they did yesterday, we can make good assumptions about the defense they will use tomorrow. Values do not change from day to day. A person with a reputation for taking risks will be predisposed in that direction in the future. A person who places great value on status will go on searching for status. People act in accordance with what they believe to be in their own self-interest. They generally believe their behavior to be rational and wish to protect their self image. As an outsider, you may think certain people wrong, but recognize that their behavior makes sense from their viewpoint. Ask questions, listen, speak rarely, observe and be nonjudgmental. If you have the patience to listen, they will reveal their self-image to you. In negotiating knowledge is power."

 

Pre-Settlement Agreements

 

"Formal agreements that address specific issues and obligations but are intended to be replaced by a final agreement because they do not address or resolve all of the issues being negotiated. Often used as an interim agreement to keep the talks moving, and show the resolve and commitment of the parties to continue to work towards full agreement. See Agree in Principle"

 

Price Breakdowns

 

"Sellers should never give price breakdowns. Buyers should always try to get price breakdowns. The less a seller tells the buyer about their costs the better off they are. The more the buyer knows about the seller’s costs and profits, the better their negotiating position. With respect to cost data, what is good for one is generally bad for the other. Sellers should start their negotiation on the basis that cost and pricing methods are nobody’s business but their own. A buyer is well advised to insist that part of the price paid is access to full cost and production visibility. They have the right to know what they are buying and why the price is right."

 

Principle of Reciprocity

 

See Reciprocity Principle.

 

Principled Negotiation

 

"A principled negotiation is an interest-based approach to negotiation that focuses primarily on conflict management and conflict resolution and hopefully leads to a mutually shared outcome. This approach is primarily used by mediation practitioners and academics, although some attempt to apply this approach to commercial or business negotiations."

 

Prisoner's Dilemma

 

The pursuit of individual self-interest leads to collective disaster.

 

Problem Solving Bargaining

 

"In every negotiation the potential exists for the parties to improve their joint satisfaction at no loss to either. The more intense the search for joint improvement, the more likely people will be to find superior solutions. This process of joint improvement is called problem-solving bargaining."

 

Pseudo-Sacred Issues

 

"One party to a negotiation declares that certain issues are sacred and are not negotiable. If the issues really are not sacred but only positioned as such for strategic purposes, these issues are called pseudo-sacred issues."

 

Q

 

Quanxi

 

"A Chinese term that means ‘good will.’ A person accumulates Quanxi by networking with people, doing favors for associates, performing well in their business relationships. Quanxi can be thought of as a ‘savings account of good will’ accumulated from all of your business relationships. When a favor or introduction is needed, you can spend some of your Quanxi to accomplish what you need. Quanxi is a valuable asset that needs to be protected."

 

Quid Pro Quo

 

Tit for Tat. A negative use of Quid-Pro-Quo is when a negotiator suspects the other negotiator is lying and retaliates with their own lies.

 

Quivering Quill

 

Ask for a concession just before signing. See ‘Nibble.’