5 Things Most People Don't Know About Negotiating
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Many of us often shy away from asking for more and better. More money. Better working arrangements. A larger team. Better access to material resources. Higher fees. Better prices.
Some of us are afraid to ask. Some of us do ask, but stop short of asking for what we really want or what we’re truly worth.
But whatever your reason, I probably don’t have to tell you that, by not asking, you’re missing out on more than just money; you’re putting your long-term opportunities and earning potential at stake.
If you’ve ever stopped before negotiating your true market value, read on for five things most people don’t know about negotiation that will change the way you think about asking—and give you a strong leg up when you do.
1. The Negotiation Doesn’t Start Until Someone Says “No”
One of the greatest inhibitions my clients have is risking rejection. This is particularly true in the post-’08 meltdown and continuing jobless recovery from the worst economic calamity since the Great Depression.
Our reluctance to negotiate past “no” is even harder because both men and women miss the key point: It’s not really a negotiation if we’re asking for something we know our bargaining partner also wants. Negotiation is a conversation whose goal is to reach an agreement with someone whose interests are not perfectly aligned with yours.
And let’s be honest, who has relationships with people who always want what we want? No one! So if we want to get what we’re entitled to get or capable of getting, we either have to negotiate past “no” or spend the rest of our work lives being victimized by people who are happy to place themselves and their needs ahead of ours.
“No” signals an opportunity to problem-solve the conflicting and overlapping interests both parties want to serve. Invite your bargaining partner to your side of the table to figure out how both of you can get as much as each of you wants as possible.
2. Your Bargaining Partner Will Be Happier if You Make Several Concessions Than if They Get What They Think They Want
This is true in the same way that “the earth is round” or “the universe is expanding” are true. In experiment after experiment, social scientists have proven that people are not particularly happy when they get what they think they want. They’re happier when their bargaining partner says “no” a couple of times before they say “yes.”
Why? Because negotiators are more afraid of leaving money on the table than they are about getting what they think they want. If I ask for a 5% raise and my boss says “yes” without hesitation, I generally suffer from buyer’s remorse, certain that if I’d asked for 7% or maybe even 10%, my bargaining partner would have given it to me.
This is just one of the many reasons why it’s important to ask for more than you actually want. The other reason to do so is the proven influence of the first number put on the table. Negotiators call that number an “anchor” because it sets one end of the bargaining range and moves your negotiation counterpart in its direction throughout the course of the bargaining session.
If you’ve adequately researched your negotiation partner’s interests and your own market value, you needn’t fear making the first offer, hoping that his or her first offer will be far more than you’re expecting. Waiting for the “other guy” to make the first offer is the mark of a negotiation amateur.
3. It’s Never About Money
Though we seldom reflect on our relationship with money, if asked we’d have to admit that money itself—in its tangible form—can neither sustain life nor enhance it.
Cash, checks, credit, money orders, and wire transfers cannot themselves be consumed. Grant deeds and lease agreements cannot be inhabited. Stock certificates cannot create warmth in winter nor illuminate the dark of night.
That being the case, there is no relationship and every relationship between any given sum of money and what it can buy. With $20 in my wallet, I can purchase dinner for five at McDonald’s or a bottle of cheap Bordeaux at a local restaurant. I can pick up a pair of sandals at Payless, subscribe to Time magazine for six months, rent a surfboard at the beach, or fill half my tank with gas.
Before negotiating any deal, take a look at the way in which you “value” money. Is it status you’re seeking? Security? Education for your children? A meaningful break from work that takes you to a foreign country or high-end spa? Then ask your negotiation partner what they value, prefer, need, fear, prioritize, or desire.
You’re apt to find yourself on the same page of value once you stop treating money as an objective measure of worth and start seeing it for what it is—a subjective experience that can make $1,000 act in the world as if it were $10,000.
4. Your Bargaining Strength is All in Your Head
The person who is perceived to have the least to lose is the person with the greatest bargaining advantage. If you’re negotiating—that is, having a conversation leading to agreement—there is always something at stake for both parties.
A good example: Many say the Los Angeles or San Francisco or New York City real estate markets are over-heated and that everything is over-priced. It’s a seller’s market. It seems as if there are an unlimited number of people willing to pay “over asking” and many of them “all cash” for every home or condo or co-op for sale. Doesn’t that mean that all buyers are in a weak negotiating position and all sellers in a great one?
Every seller is selling for a different reason. A considerable number of homeowners are retiring. Their kids are gone and they don’t need so much space anymore.
Some of them have already signed up for a place in a retirement village or a condo in Palm Springs. They’re pressured by time. They could pay for both residences for a month or two, but if it takes them six months to get the price they want, they’ll have spent the extra purchase price on rent or mortgage payments in their new home.
The more knowledge you have of the hidden interests and constraints under which your bargaining partner is operating, the more negotiation power you have, even in a “seller’s” market.
But there’s even better news than that! If you act as if you’re prepared to walk away from a deal unless you achieve your desired goal, your bargaining partner will be far more incentivized to meet your requirements or make serious problem-solving efforts to create enough value so that both of you get what you want.
5. Any Reason’s Far Better Than No Reason and Nearly as Good as an Excellent One
When people estimate their value to their company by the results that their work has produced, they often hesitate sharing that information. “I can’t prove that,” they say, and being unable to “prove” it, they feel unable or unwilling to take credit for it.
Here’s the super secret of all great negotiators: You don’t have to prove something that justifies what you want; all you have to do is say it.
When you’re negotiating, you’re not in a court of law. You’re rarely making statements of fact that could land you in hot water for fraud if they prove to be untrue. You’re stating an opinion, and no less an authority than the Supreme Court of the United States has said there is no such thing as a false opinion.
In common parlance, you’re puffing. The social science research confirms that appearances are reality.
In one experiment, students were asked to cut in line at a local Kinkos. One group was told to give no reason, one a nonsensical reason, and one a good reason.
Can I cut in line?
Can I cut in line? My mother’s in the hospital, and I need to get these papers copied before I can go see her.
Can I cut in line? I need to.
Here are the compliance rates:
No reason: 40%
A good reason: 98%
A nonsensical reason: 97%
So, go ahead. Take credit for last quarter’s increase in net profits even if you can’t prove it. You don’t have to file a declaration under penalty of perjury or testify under oath on the witness stand. You're highly unlikely to be cross-examined because your negotiation partner can't prove that your causal assertion is untrue. Millions of years of “common sense” support your assertion that correlation is causation.
It’s not. But it might as well be.
Feel free to try out these strategies and tactics at home with the people closest to you. Can’t agree on a movie? Be willing to walk away if your choice isn’t met. Give a reason, any reason, why your choice would be better for everyone, not just for yourself.
Understand that the push-back you’re getting is just an opportunity to problem-solve in a way that satisfies your interests and the other party’s interests at the same time. Do this at home, and then try it out with that raise you haven’t gotten for the past five years.